The Federal Reserve said yesterday that it would raise its target interest rate range by a quarter of a point, citing a strong labor market and other signs of economic expansion.
Sales at USA retailers rose 0.8% from a month earlier to $502 billion, the Commerce Department said Thursday.
The retail "control group" sales, which excludes some of the more volatile numbers, rose 0.5 percent, which also exceeded forecasts.
"This suggests a pretty strong rebound in second-quarter growth", said Joseph Song, senior US economist at Bank of America Corp.
US retail sales increased more than expected in May as consumers bought motor vehicle and a range of other goods even as they paid more for gasoline, the latest indication of an acceleration in economic growth in the second quarter.
USA retail sales rose by the most in six months in May, as consumers spent more at home and garden stores, gas stations and restaurants.
Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.5 percent last month after an upwardly revised 0.6 percent increase in April. Solid gains in household purchases - the biggest part of the economy - and steady business investment are among reasons growth is projected to regain momentum in the second quarter. Economists surveyed by Bloomberg News earlier this month saw gross domestic product expanding at a 3.3 percent pace this quarter, up from 2.2 percent in the previous three months.
Growth estimates for the April-June quarter are as high as a 4.6 percent annualized rate. That marked the biggest one-month jump since November.
Despite rising gas prices, Americans spent more at restaurants and bars, as well as at clothing stores, with sales rising 1.3 percent for both. Prices at the pump have risen by 15.5 percent this year, according to U.S. Energy Information Administration data.
Sales at building material stores rebounded 2.4 percent last month after declining 0.8 percent in April.