Economy Watch: Retail Sales Up in May; Oil Prices Hit New Highs; Unemployment Up

U.S. retail and food sales in May were up 0.3 percent compared with April. Foreign oil prices have gone up. Initial unemployment claims increased this week.

The Census Bureau reported on Thursday that U.S. retail and food sales in May were up 0.3 percent compared with April, adjusted for seasonal variation and holidays, but not for price changes (though inflation is still pretty low). At a total of $437.6 billion, sales were up 4.3 percent compared with May 2013.

It also turned out that retail sales in April were stronger than initially reported. The bureau said last month that the month-over-month increase in April compared with March was 0.1 percent, but the latest report revised that increase to 0.5 percent.

Most categories of retail sales have increased since last year. Cars and car part sales were up a healthy 8.2 percent since May 2013, for example, and sales at health and personal care stores gained 4.5 percent year over year. Even furniture stores – which took a serious beating during the recession – saw sales up 3.5 percent annually in May.

A handful of retail categories saw sales drop compared with last year. Sporting goods, hobby, book, and music stories experienced a drop of 4.5 percent, and department stores, which haven’t been able to catch much of a break in recent years, lost 3.2 percent of their sales since a year ago. Gas sales were down 1.7 percent compared with last year, but that’s mostly because of fluctuations in price.

Oil Prices Hit New Highs

Developments in Iraq, the second-largest oil producer in OPEC, seem to have driven the price of crude oil on international markets to new highs this week. By Thursday, Brent crude futures had risen to $113.3 per barrel, while West Texas Intermediate advanced to $106.7 per barrel, the highest reading for both since September.

The domestic price of gas hasn’t been affect much – yet. According to AAA, the average nationwide for a regular gallon of gas was $3.65 on Thursday, down a bit from a week ago, when it was $3.66. A month ago, the average per gallon was $3.652, and even a year ago things weren’t much different, with the average at $3.634.

Separately, the U.S. Department of Labor reported on Thursday that for the week ending June 7, initial unemployment claims came in at an annualized 317,000, an increase of 4,000 from the previous week. The four-week moving average was 315,250, an increase of 4,750 from the previous week. Both figures are within the normal range for periods of economic expansion.

Wall Street retreated more from its record highs on Thursday, with the Dow Jones Industrial Average off 109.7 points, or 0.6 percent. The S&P 500 was down 0.7 percent and the Nasdaq lost 0.8 percent.