Are American Consumers Ready to get Back in the Water?

Retail sales in May increased by 0.5%, indicating, on the surface, that consumers may be ready to resume a higher level of retail purchasing. Could American consumers really be coming around so soon? After a closer look, over half the 0.5 % increase in May retail sales was due to a price-related jump in gasoline sales. In fact, core retail sales, which exclude automobiles, gas, and food, increased only 0.1% (after a 0.1% decrease in April). The actual retail sales trend seems to be relatively flat. This, of course, is better than a decline, and may signal the start of a turn-around for retail sales.
One thing to keep in mind is that, as a result of the increase in gas prices, consumers could be put under more pressure, and even the 0.1% increase in core retail sales could easily be reversed. With most U.S. consumers still feeling the pinch, retail sales should remain sluggish for some time.

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