Wall Street Journal (06/14/13) Eric Morath; Suzanne Kapner
The U.S. Department of Commerce has reported that overall retail sales increased 0.6% in May, up 4.3% from May 2012. The rise in consumer spending, aided by growing home values and stock prices, may indicate the economy will strengthen later this year; consumer spending accounts for more than two-thirds of total demand in the U.S. Despite fears about the effect of the January payroll tax increase, consumers have continued to spend. Economic growth will remain moderate, however, due to the diffusing effects of the government sequester.
Although the labor market is improving slowly, consumer resilience should give U.S. Federal Reserve policy makers “some comfort that solid job gains are sustainable,” says JPMorgan Chase economist Michael Feroli.