Consumers were spending more than expected in both April and May, while the pace of job destruction appears to be slowing in the first week of June, according to two government releases an hour before the opening bell on Thursday.
The U.S. Census Bureau said Retail Sales improved a bit more than expectations in May, recording a 0.5% monthly gain, compared with the market forecast of +0.4%. The monthly gained trimmed the annual decline in sales from double digits to -9.6%.
The less volatile ex-autos figure also improved 0.5%, following a revised 0.2% cut in April. On a year-to-year basis it is down 7.3%.
Upward revisions may be just as important as the headline. The monthly decline in April was revised up from -0.5% to -0.2%; excluding autos, it was revised up from -0.5% to -0.2%.
The 3.6% gain from gasoline station sales was the biggest categorical increase in the report, while the steepest decline was in miscellaneous stores with a 1.3% fall.
Meanwhile, the Jobless Claims survey was a mixed bag. Initial Claims came in lower than expected with 601k claims in the first week of June, compared with 625k in the week before. The 4-week average fell 10k to just under 622k.
However, Continuing Claims ― a measure of how many people continue to receive unemployment benefits ― resumed its upward trek in the final week of May. Continuing claims came moved up 59k to 6.816 million in the week, after reporting its first fall in four months in the week before.
“The U.S. labor market is still dazed and confused, and will likely continue to be so after the economy has turned,” said Ian Pollick from TD Securities.
He said the pace of job destruction appears to be slowing, but with job creation at a standstill the labor market will continue bleeding even once broader recovery begins.