Strong growth in gasoline prices lifts US retail sales

WASHINGTON: US retail sales rose for the first time in three months in May and the number of workers filing new claims for jobless benefits last week hit the lowest level since January, suggesting the recession was abating.

The Commerce Department said on Thursday that sales at US retailers rose 0.5% past month, lifted by strong gasoline and building material receipts. A separate report from the Labor Department showed the number of US workers filing new claims for jobless aid fell 24,000 to 601,000 in the week ended June 6, the lowest since the week of January 24.

���It looks like we are turning the corner. There is pretty clear evidence that the worst of the labor downturn has passed, but we still expect more job losses,��� said Zach Pandl, an economist at Nomura Securities International in New York. US stocks were modestly higher, while the value of the dollar edged up against the Japanese yen.

The data bolstered the argument that the economy���s severe recession was close to hitting a bottom, with the sales report raising optimism that consumer spending would probably be flat to only modestly lower in the second quarter. However, analysts said the sales strength was largely a mirage that reflected higher gasoline prices.

Gasoline prices in rose in every week in May, according to government data, increasing from $2.13 a gallon at the beginning of the month to $2.57 by June 1. Excluding sales at gasoline stations, retail sales rose just 0.2%, the Commerce Department said. ���The (economy���s) tender green shoots could be snuffed out by the frost of higher mortgage rates and gasoline prices,��� said TJ Marta, chief market strategist at Marta on the Markets in Scotch Plains, New Jersey.

Consumer spending, which accounts for about 70% of US economic activity, rose at a 1.5% annual rate in the January-March period after a 4.3% dive in the fourth quarter of last year.

Gasoline sales jumped 3.6% last month after dropping 0.8% in April, whiles sales of building materials climbed 1.3%, the biggest gain since April last year. Car sales rose 0.5%. Foreclosure filings dipped 6% in the month but increased 18% from May 2008, marking the third highest month on record.