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US in retail tax ‘surprise'
US consumers are not allowing the ongoing US downturn to dampen their spirits...
In something of a surprise, US retail sales climbed hit a six month high in May after spending was helped by tax rebates. According to the US Commerce Department (USCD), sales increased by a better-than-expected 1% in May, the largest rise since November. The USCD also indicated that April's figure had been revised up to a rise of 0.4% against the previous estimate of a 0.2% fall.
An Economist at the USCD commented: “The rise indicates that the economy had been given a boost by the stimulus package under which millions of Americans got tax rebates”.
The stimulus payments were introduced to try to avoid a recession in the US by offsetting some of the gloom brought on by the credit crisis, housing market slump and surging energy bills.
Recent data released by the US Labor Department (USLD), further revealed that the economy had also been hit by redundancies. Data showed that the number of new applications for unemployment benefits rose by 25,000 last week to 384,000 - the highest level since March and more than analysts had expected.
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