Economic Watch: Retail Sales Post Another Solid Gain
U.S. retail sales rose a stronger-than-expected 0.5% in May from the month before, building on a strong April gain, which could lead to better expectations of overall second quarter economic growth.


U.S. retail sales rose a stronger-than-expected 0.5% in May from the month before, building on a strong April gain, which could lead to better expectations of overall second quarter economic growth.
The new Commerce Department report beat Wall Street expectations of a 0.3% increase for May and follows an unrevised 1.3% jump in April, for the second straight monthly gain. Compared to May 2015, retail sales improved 2.5%.
Retail sales are important for trucking for several reasons. They drive about two-thirds of all U.S. economic activity, and retail freight spends at least part of its life on trucks before making it to store shelves.
Excluding the auto sector, retail sales rose 0.4%. Retail sales minus autos, gas stations, and building material stores also posted a 0.4% increase, which builds on a upwardly revised 1% jump in April, up from a first reported 0.9% increase.
Strong increases over the last two months have left overall sales up an annualized 5.7% to-date in the second quarter. “Core sales,” which feed directly into the government quarterly real consumer spending estimates, are up a similar 5.9% second quarter to-date, according to RBC Economics.
“The gain in retail sales in May was unexpectedly solid and built on an outsized April increase to leave upside risk to our forecast for a 3.2% annualized gain in Q2 real personal consumption expenditures, up from 1.9% in the first quarter, with a 3.5% rate of increase now looking more likely,” said RBC Senior Economist Nathan Janzen.
He said the weak 38,000 job gain in May reported last week could point to risk of slower economic growth going forward. However, the slower employment growth came from higher wages, leaving aggregate labor income still rising at a solid rate.
“We expect part of the downward employment surprise in the month simply reflected monthly volatility,” Janzen said. “Part was also likely indicative of a slower underlying trend, but reflecting labor supply rather than demand factors that have offsetting upward implications for wages. We assume, on balance, somewhat slower employment gains going forward than the 200,000 and over increases we have become used to in recent years, but alongside continued wage growth that will leave a still supportive backdrop for household incomes and spending.”
With two straight months of healthy retail sales, an increasing number of analysts are revising upward their estimates for second quarter gross domestic product growth, which posted just an 0.8% annual improvement in the first quarter, according to the most recent government numbers.
More Fleet Management

Kodiak Lines Up Fleets for Driverless Trucking
An agreement for 75 trucks, a new Texas freight lane, and progress on safety validation move Kodiak closer to its planned driverless highway launch.
Read More →
ITS Logistics Settles Religious Harassment Case
The Nevada-based logistics firm agreed to pay more than $396,000 to settle a religious harassment charge involving an employee's Jewish identity.
Read More →
Your Trucks Are Busy. That Doesn’t Mean They’re Winning.
High utilization doesn’t always mean strong margins. Looking beyond the current load can help fleets make better dispatch decisions and get more value from each truck’s time.
Read More →
Why This Trucking Recovery Is Different
Freight demand remains sluggish, but rising costs and tougher enforcement have taken enough capacity out of the market to change the outlook for motor carriers.
Read More →
Platform Science Adds Dispatch and Safety Tools
Four additions to PS Fleet help fleets monitor loads, manage driver coaching, share truck locations and adjust video system settings.
Read More →
PrePass Intelligence Mines Fleet Bypass, Toll and Safety Data
PrePass Intelligence helps fleets measure bypass savings, flag potential toll overcharges, and spot suspicious transactions by combining data from separate systems.
Read More →
Motive Adds AI Agents for Fleet Operations
New tools automate follow-up on fleet data, from maintenance work orders to driver alerts, with two-way voice conversations planned for later this year.
Read More →Can You Beat Our Trucking Trivia Challenge?
Test your truck knowledge with 19 trivia questions from Heavy Duty Trucking Exchange. Can you keep up with the fleet pros?
Read More →
BeyondTrucks Adds Rules Checks to Dispatch
New Compatibility Engine checks driver qualifications, equipment requirements and fleet policies before loads are dispatched.
Read More →
Diesel Prices Hijack Trucking’s Worry List
ATRI’s annual survey finds cautious optimism about freight, but diesel costs, litigation, and insurance continue to squeeze fleets. Drivers have different priorities on several issues.
Read More →
