sales

Sales at U.S. retailers unexpectedly fell in May for the first time in eight months, but a jump in consumer sentiment to a near 2-1/2 year high in early June tempered fears of a slowing economic recovery.

The drop in sales reported by the Commerce Department on Friday reflected weak gasoline prices and the end of a home buyer tax credit that had boosted sales of building materials.

Analysts said the underlying trend of steadily advancing consumer spending was intact — despite some recent data that suggested a slowing of the recovery — and there was little risk of the economy slipping back into recession.

“We have placed a double-dip in the U.S. for a long time at 15 percent and that is still where we are. The most likely scenario is the economy continues to grow at a 3-percent pace,” said Michael Strauss, chief economist at Commonfund in Wilton, Connecticut.

Total retail sales dropped 1.2 percent in May after rising 0.6 percent in April. Economists had forecast a May rise of 0.2 percent.

Receipts from building materials suppliers tumbled a record 9.3 percent in May after the expiration of incentives to boost the sale of energy-efficient appliances.

Gasoline prices, which normally rise in May, fell and weighed on the dollar value of sales.

source www.reuters.com/article/