Will shoppers’ increased spending in May last?
NEW YORK — Americans loosened their purse strings in May, but it may have been a temporary splurge.
Some major retailers such as Target and Macy’s on Thursday posted sales increases that beat Wall Street estimates as shoppers were lured in by Mother’s Day promotions and colorful new styles of clothing. The gains follow a dismal showing from the month before.
Still, it may not be time to celebrate just yet. Revenue growth remains down from earlier in the year and worries about the global economy are starting to escalate again.
Michael Niemira, chief economist at the International Council of Shopping Centers, said while May’s results are encouraging, he thinks troubling economic data will continue to weigh on consumers’ minds in the months ahead.
“There’s something out there that’s worrying consumers,” he said.
Only a handful of retailers representing roughly 13 percent of the U.S. retail industry report monthly sales figures based on stores open at least a year, which is a key measure of health because it excludes the effect of newly opened and closed stores. But economists watch the numbers because they offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.
On average, retailers posted a 4 percent rise in May for revenue at stores open at least a year, according to the international shopping trade group. That’s better than the 3.6 percent analysts were expecting. It’s also up from the 2.4 percent in April – the worst monthly performance since November 2009.
A variety of retailers, from discounters to luxury chains, posted gains during the month.
Among them, Target, a Minneapolis-based discounter, said its revenue at stores open at least a year was up 4.4 percent, beating the 3.5 percent analysts polled by Thomson Reuters were expecting as shoppers spent more on its expanded food offerings and cheap-chic fashions.
Nordstrom, based in Seattle, also said the figure rose 5.3 percent, above the 4.7 analysts were expected, helped by women’s shoes, handbags and cosmetics.
And Cincinnati-based Macy’s, which reported its results on Wednesday, said the figure at its Bloomingdale’s and namesake department stores was up 4.2 percent. That beat the 4 percent that Wall Street expected.