Consumers' retail spending spiked 17.7% in May from the prior month, the largest monthly increase since 1992. This blew economists' 7.7% estimate out of the water.
Major stock indices surged today on this optimistic economic news with S&P 500 tracking ETF SPY up 1.9%, Nasdaq 100 tracker QQQ was up 1.7%, and Dow Jones tracker DIA rose over 2.1%.
The swell in consumer spending comes as state economies finally start opening back up. There had been an enormous amount of pent up demand, and consumers were ready to spend. The largest monthly increase came from auto sales, which surged over 44% from April's figures.
May's retail spending was still 8% shy of February's pre-pandemic levels. The pent-up demand spending we saw in May cannot be sustained in our current economic environment.
With unemployment in the double-digits, it may be years before retail spending surpasses pre-COVID levels.
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