WASHINGTON (AP) -- The Commerce Department releases retail sales data for May on Thursday at 8:30 a.m. Eastern.
REBOUND: Economists forecast that retail sales climbed 1.2 percent in May, according to a survey by FactSet.
Strong auto sales likely drove the growth, while a monthly increase in gasoline prices also pushed up spending. The gains would follow a weak April, when retail sales were flat as consumers cut back on their spending.
People bought cars and trucks last month at an annual pace of 17.8 million, the fastest rate since July, 2005, according to industry analyst Autodata Corp. Gas prices also rose in May, rising by roughly 14 cents a gallon to $2.74 during Memorial Day weekend, according to AAA's Daily Fuel Gauge Report.
JOBS, BUT NO SPENDING: There has been a surge of hiring since early 2014, yet workers have been hesitant to spend their new paychecks. The meager spending stems in part from average hourly earnings rising at 2.3 percent over the past 12 months, a pace that has recently accelerated but remains below the 3 percent level typical in a healthy job market.
Employers have added 3.1 million workers during the past year. The hiring has driven down the unemployment rate to 5.5 percent from 6.3 percent in May 2014.
Economists watch the retail sales report closely because it provides the first indication each month of the willingness of Americans to spend. Consumer spending drives 70 percent of the economy. Yet retail sales account for only about one-third of spending, with services such as haircuts and Internet access making up the other two-thirds.
Consumer spending was unchanged in April, the Commerce Department reported separately. On the whole, Americans chose to set aside a larger share of their paychecks. The savings rate reached 5.6 percent of after-tax incomes, the second highest level since December 2012.
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