In May, US retail sales came out exactly in line with expectations, rising by 0.5% M/M. The previous figure was upwardly adjusted from -0.4% M/M to -0.2% M/M. Looking at the details, the improvement was driven by a 3.6% M/M rise in gasoline stations, which was basically price driven, but also building materials (1.3% M/M), health, personal care (0.7% M/M), motor vehicles, parts (0.5% M/M), food, beverages (0.4% M/M) and clothing (0.4% M/M) rose significantly in May. Sporting goods (-0.8% M/M), department stores (-0.7% M/M), electronics (-0.5% M/M) and furniture (-0.4% M/M) dropped significantly. Although better than expected, much of the improvement in retail sales was driven by increasing crude oil prices. In the coming months, it will be interesting to see whether this improvement can be sustained.
In the week ended June 6, initial claims dropped by 24 000 from an upwardly revised 625 000 to 601 000, while the consensus was looking for a slightly higher figure (615 000). Continuing claims, which are reported with a one-week lag, surprised on the upside of expectations and also the previous figure was upwardly revised. In the week ended May 30, continuing claims rose to 6 816 000, while an outcome of 6 780 000 was expected. Initial claims are now at their lowest level since January 23, which suggests that the claims are certainly ebbing.
US Business inventories dropped by 1.1% M/M in April, broadly in line with the consensus estimate. The previous figure was however downwardly revised from - 1.0% M/M to -1.3% M/M. Looking at the details, the cutback in inventories was led by a 2.4% M/M decline in inventories of autos. The April outcome showed the eighth consecutive decline and a further inventory reduction is forecasted for the coming months. The Inventory/Sales ratio dropped slightly from 1.44 to 1.43.
