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Auto sales speed ahead
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June 11, 1998: 9:55 a.m. ET
Dealer discounts drive car sales to fastest rate in more than a year
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NEW YORK (CNNfn) - A boom in auto sales was a driving force behind the seventh straight month of gains in retail sales overall last month. A soaring bond market was calm to the news as economists were anticipating it.
Retail sales rose 0.9 percent to a seasonally adjusted $224.6 billion in May, the Commerce Department reported Thursday. That marked a 6.6 percent gain from May a year ago and was in line with economists' expectations.
Meanwhile, the April reading rose by 0.7 percent, up from preliminary estimates of a 0.5 percent rise.
"Overall, I think what the sales number is telling us is that the consumer is starting to take up some of the slack we're seeing in the trade sector and inventories," said Bruce Bartlett, an economist with the National Center for Policy Analysis.
"It's a very good, solid number, more so if you take account of the fact that there has been heavy discounting in the auto sector," he said. "In real terms the increase is even better than it appears."
Auto sales surged by 2.4 percent in May, the biggest month-to-month gain since February of last year and 11.2 percent higher than in May a year ago.
Sales of durable goods rose 1.7 percent from April, while sales of non-durable goods climbed 0.4 percent.
The bond market reacted coolly to the announcement, hovering near all-time low interest rates on the long bond.
The 30-year Treasury issue was up 1/32 in price for a yield of 5.69 percent following the news.
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