U.S. retail sales rose .5% in May from April but were actually down 11% from last year. In fact, rising gas prices accounted for a large part of the monthly increase. The other good news is that only 601,000 workers filed for unemployment claims last week. This was a drop of 24,000 claims. It hardly brings joy to us to see so many workers without jobs but the economists will probably like the numbers.
As long as gas prices keep rising and interest rates move up, the consumer will be weakened and the recession will drag on. Retailers will be compelled to keep prices low in order to drive sales but don't expect profits to be healthy. The stock market will keep evaluating the economic tea leaves and ultimately recognize investors hope for the v-shaped recovery was too optimistic.
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