Soft Retail Sales Report Points to Stop-Start Economy, More Low Interest Rates

NEW YORK (TheStreet) -- The retail sales number is soft all over -- no really terrible details, but none that hold many clues to where the next stage of the expansion will come from either.

The Census Bureau said May retail sales rose 0.3% -- missing forecasts of 0.6% growth. April sales were revised upward, to 0.5% growth instead of 0.1% as originally reported. And category results were mostly kind of in-between, with the notable weak points being restaurant sales and the latest drop in department store sales.

The basic picture of the consumer doesn't change much. People are still shopping for things that either suggest they are buying houses or renovating them, with home-improvement store sales rising 1.1% and furniture up 0.5%, offset partly by a 0.3% dip in electronics and appliances.

The 0.2% drop in restaurant sales is the closest thing to suggesting that consumer confidence has flagged at all, but the 1.5% gain in autos, the latest in a 12-month jump totaling 11.1%,, seems to cancel out that analysis.

Big, bad numbers came from a decline in grocery store sales and clothing sales. But clothing is too small a category to matter much, and a 0.1% dip in food sales isn't going to worry policy makers much.

The takeaway is that the Federal Reserve basically has it right: The economy is still soft enough to be well into easy-money territory, if perhaps not as easy as last year. There's nothing here that points to any acceleration -- in activity, in prices, in consumers' urgency.

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