Jim Cramer on Retail Sales: This Is Consumer Bouncing Back
Markets surged at the opening bell Tuesday, largely driven by stronger than expected May retail sales.
May retail sales rose a record 17.7%, far exceeding an expected 8% gain and surpassing a sales peak recorded in 2001.
Driving the increase was the millions of Americans who returned to work as businesses and stores reopened following the economic shutdown amid the coronavirus pandemic. The May jobs report, the latest reading on U.S. employment, showed some 2.5 million jobs were added to the economy in May.
The report was enough to inspire a tweet from President Donald Trump, who predicted a “big day” for the U.S. market ahead.
Stocks rallied at the open with the Dow Jones Industrial Average jumping 831 points, or 3.23%, to 26,594, the S&P 500 rising 2.77% and the Nasdaq gaining 2.33%.
Leading the landmark retail sales was clothing and footwear, which gained 188%, furniture, gaining 89.7%, and hobby and book stores, which gained 88.2%.
Despite the strong report, markets must still cope with fears of a second wave of coronavirus and its subsequent economic consequences. As of June 16, over 8 million cases have been reported worldwide, with cases rising in China and some U.S. states.
How should investors approach retail sales?
Though he acknowledged threats from the coronavirus remains, Jim Cramer said the report signifies that the American consumer is bouncing back.