Retail sales pick up in May

Retail sales ticked up in May but came in below expectations, although they are expected to accelerate for the rest of the year.

Sales rose 0.3 percent last month driven by a stronger demand for autos, the Commerce Department said Thursday.

The National Retail Federation (NRF) said that, while on the surface, May retail sales were disappointing and weaker than expected, April's upward revisions indicate positive growth for the remainder of the year.

April posted a 0.5 percent increase, which came in higher than the initial estimate of 0.1 percent.

The economic fundamentals — consumer confidence, employment and income — remain strong, the NRF said.

Auto sales increased 1.4 percent, helping to prop up the May figure.

Otherwise, May sales were strong in several areas, including building supply stores, furniture and home furnishing stores, and nonstore retailers.

Department store sales fell 1.4 percent, electronics sales were down 0.3 percent and sporting goods sales dropped 0.1 percent. 

Employers added 217,000 jobs in May, which should eventually boost incomes and consumer spending.

Economists are expecting a nice pick up in growth in the second quarter, between a 3 percent and 4 percent annual pace, an improvement from the 1 percent contraction during the first three months of the year.