U.S. retail sales jumped by the largest amount in six months in May as cash from government stimulus tax-rebate checks helped offset soaring prices and the worst housing slump in decades. The Commerce Department reported Thursday that retail sales rose 1 percent last month, the biggest increase since November. A wide variety of retailers enjoyed a good month. The May increase was double what economists had expected and indicated that the economy is receiving a major boost from the $50 billion in economic stimulus payments the government sent out in May. The Bush administration hopes the stimulus payments will help offset the pessimism from a prolonged housing slump, a severe credit crisis, soaring energy and food costs, and rising layoffs and help the country avoid a long downturn. Economists, however, did not view Thursday's data as suggesting a fundamental shift in a generally weak spending trend, noting that the rebate checks were a temporary aid to household spending that will not be repeated in the near future. Highlighting pressures on the job market, the Labor Department reported Thursday that new applications for jobless benefits rose by 25,000 last week to 384,000, the highest level since late March. Last week, the government reported that the national unemployment rate jumped to 5.5 percent in May, up from 5 percent the previous month. In a third report, the Commerce Department said that business inventories grew by 0.5 percent in April, more than double the 0.2 percent rise in March and the best performance since inventories rose by 1 percent in January.
