Retail sales in May increased at the fastest pace in 16 months, as Americans flocked to malls, undeterred by record gasoline prices and falling home values.
The Commerce Department said Wednesday that sales rose 1.4 percent, twice as much as economists expected and the most since January 2006. Purchases excluding automobiles advanced 1.3 percent.
In a second report, the Labor Department said import prices climbed 0.9 percent last month, three times the pace analysts were expecting.
The figures add to evidence the economy is accelerating after barely growing in the first quarter, and some traders began betting the Fed will have to raise interest rates this year. The Fed’s policymaking committee meets June 27-28.
“Today’s reports will continue to ease concerns about the downside risks to growth, and will increase concern over the risks of inflation,” said Dean Maki, head of U.S. economic research at Barclays Capital Inc. in New York. “The economy is rebounding quite nicely in the second quarter, and inflation pressures remain.”
All 13 retail categories tracked by the government showed an improvement in sales last month, led by a 3.8 percent jump at service stations. A gallon of regular gasoline at the pump averaged $3.12 in May, compared with $2.83 a gallon in April, according to the American Automobile Association.
But the increase in fuel costs didn’t deter Americans from going to the malls and auto dealers. Sales excluding gasoline rose 1.2 percent, the most since July. Vehicle sales advanced 1.8 percent, also the most since July, and purchases at department stores surged 1.3 percent, the most since October 2005.
Even housing-related purchases showed gains. Sales at building-materials and garden-supply stores increased 2.1 percent. Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product figures for consumer spending, sales rose 0.8 percent.
In the second report, the Labor Department said the prices of imported goods rose 1.1 percent in the 12 months ended in May, after a 2.1 percent year-over-year increase in April.
The import-price index is the first of three monthly price gauges from the Labor Department. The government is scheduled to release its measure of wholesale prices Thursday and its consumer price index Friday.
