NEW YORK (TheStreet) -- Retailers have an opportunity to benefit from the strengthening consumer, especially if the housing market rebounds, one economist said. 

"When you look at spending on household-related items like building materials, garden supplies and electronics, that was running at about 18 to 19 percent of total retail spending before the recession," said Steve Blitz, chief economist of ITG. "It's down now to around 14 percent, but if the housing market picks up, there's a lot of room on the upside for these retailers to capture consumer dollars."

Retail sales rose 1.2% in May, the Commerce Department said Thursday, falling short of the 1.3%  economists at Econoday expected. But the rise was much healthier than April's unchanged reading, which was revised up to 0.2%.

Building materials also saw a 2.1% increase during the month. Shares of Home Depot (HD) and Lowe's (LOW) rose about 0.5% in midday trading on Thursday.

While Blitz sees opportunity in the retail sector, TheStreet's Jim Cramer, portfolio manager of Action Alerts PLUS, a charitable trust, said retail stocks have been "inconsistent" lately, referencing names like discount retailer Five Below (FIVE) and athletic clothing company Lululemon (LULU) in a Real Money column Wednesday.

Meanwhile, spending on autos rose 2.1% in May. "I think the number we saw in May is too high to be sustainable," Blitz said, although the positive trend in auto sales is likely to continue, hence the encouraging performance in auto stocks this year.

Shares of General Motors (GM) rose 2.6% year to date, while Toyota Motors' (TM) ADR shares increased 7.7%.
Stripping out autos, retail sales rose 1%.

"Against consumer income, you're seeing retail sales catch up to aggregate income," Blitz said.  "By aggregate income, I don't mean average hourly earnings, but total wages coming  into the retail sector from higher employment and hours worked."

Amid the bright spots in Thursday's report, spending at gas stations rose 3.7% percent in May. That's not surprising, as the average price for a gallon of gas stands at $2.76, compared to $2.66 30-days ago, according to AAA.

But with higher gas prices, consumers spent less on restaurants, which only saw a 0.1% increase.

'When last year's gasoline prices were falling, people ate out more,' Blitz added.

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