U.S. retail sales increased in May, rising double the rate expected in a sign consumers were using stimulus payments.

Meanwhile, U.S. import prices jumped for a third-straight month in May.

Retail sales increased by 1.0%, the U.S. Commerce Department said Thursday. Economists had estimated a 0.5% increase.

Sales in the previous two months were revised strongly upward. Sales in April increased 0.4%; originally, Commerce said April sales dropped 0.2%. March sales increased 0.5%; earlier, Commerce said March sales rose 0.2%.

The strong increase in May sales suggested consumers were putting to work some money the U.S. government kicked back to them in a plan to stimulate the foundering economy. Congress passed an economic stimulus package, signed by President Bush Feb. 13, to free up money for people to spend in the form of tax rebates. Those payments began going out in late April. About US$48 billion in payments were cut in May.



Meanwhile, import prices soared 2.3% on a monthly basis in May, the U.S. Labour Department said today, compared to April’s 2.4% increase, which was revised up.

Wall Street economists expected a 2.6% rise last month.

Import prices swelled 17.8% from May 2007, the largest annual rise since the data were first published in September 1982.

Petroleum import prices rose 7.8% last month compared to April and were up 68.8% on the year. Natural gas prices were up 5.4%, the eight-straight monthly increase.

Excluding petroleum, import prices rose 0.5% and were up 6.6% on the year. Even excluding all fuels, prices rose 0.5% on a monthly basis and 6.1% on the year, the sharpest gain on record.


Separately, initial claims for jobless benefits rose 25,000 to 384,000 after seasonal adjustments in the week ended June 7, the U.S. Labour Department said. Economists had expected only a 9,000 rise.

The four-week average of new claims, which economists use to gauge underlying job trends, rose 2,500 to 371,500.