American consumers continued to spend at a healthy pace in May, helping drive retail sales higher despite ongoing inflation concerns and a sluggish hiring environment.

According to new Commerce Department data retail sales rose 0.9% in May, surpassing expectations and improving from April’s revised 0.4% increase. Economists noted that tax refunds distributed during April and May also helped boost household spending.

Excluding gasoline sales, retail purchases climbed 0.7% during the month.

Online retailers led the gains, with e-commerce sales rising 1.5%. Furniture and home furnishing stores saw sales increase 1%, while clothing and accessories stores posted a 0.3% gain. Electronics and appliance stores were among the few categories to decline, slipping 0.5%.

The report underscores the continued resilience of American consumers, whose spending remains the primary engine of the U.S. economy despite higher prices and softer job growth.

Fuel prices have declined significantly in recent weeks. According to AAA, the national average price for a gallon of gasoline fell to $4.02, down from $4.51 a month earlier.

Analysts say some shopping habits that emerged during the recent spike in fuel prices may continue even as prices retreat. Data cited in the report showed growing traffic at discount fuel providers such as Costco, Sam’s Club, and BJ’s, where drivers sought lower-priced gasoline during the recent surge.

(YWN World Headquarters – NYC)