June 12 - May retail sales missed forecasts, but an upward revision for April makes the quarter the strongest for retail sales in two years. Bobbi Rebell reports.
The sun came out in May but the consumer didn't shop as much as had been expected. May retail sales up just 0.3 percent- half the 0.6 percent forecast. But April showers weren't as bad as first reported- that month was revised upwards. A lot of the sales, though, have been cars. Take that and other highly volatile components like food out, and so-called core retail sales were unchanged. Chris Christopher is head of consumer economics at IHS Global Insight: SOUNDBITE: CHRIS CHRISTOPHER, HEAD OF CONSUMER ECONOMICS AT IHS GLOBAL INSIGHT (ENGLISH) SAYING: "There is some pent-up demand being released on the auto front but have in mind when people plop down money for a down payment for that new automobile they are not going to go rushing off to a fancy restaurant or buying that electronic gadget that might cost $200. They are going to be a little more cautious on discretionary items." Rising oil prices could also hamper spending. Barclays Michael Gapen: SOUNDBITE: MICHAEL GAPEN, SENIOR ECONOMIST, BARCLAYS (ENGLISH) SAYING: "Geopolitical events like we've seen in Iraq which would lead to sharply higher oil prices is something that would feed back into the U.S. economy in a negative way because it would mean consumers now have to spend more on gas and energy than they did before, leaving less to spend elsewhere. So in our minds a sharp rise or a shock to oil prices and energy prices would be the main risk for the growth outlook in the U.S." While a few economists trimmed their second-quarter gross domestic product estimates slightly on the retail sales data, most continue to expect a strong rebound with growth estimates ranging between a 3 percent to 4 percent pace.