Cash registers hummed in the United States in May as retail sales shot up by one per cent, double what economists had been forecasting.

The U.S. Commerce Department said Thursday that the retail activity for the month is the biggest increase since November 2007.

The increase came after the U.S. government issued 57 million rebate cheques to consumers to stimulate the economy.

Economists said the rebate cheques should give the economy a short-term boost.

"We expect this level of retail activity to ease somewhat after the rebate cheques get spent, with consumer spending retuning to softer levels in the second half of the year," said Millan Mulraine, economics strategist at TD Securities, in a commentary. "Nevertheless, this heightened level of consumer spending will certainly provide some much needed boost to the U.S. economy in [the second quarter]."

The U.S. government reported that sales at general merchandise stores, such as department outlets and discount stores, grew by 1.2 per cent — their best performance since March 2007.

Auto sales were up by 0.3 per cent in May, but that was a turnaround from April's decline of 2.1 per cent.

Rising gasoline prices helped push sales at service stations up by 2.6 per cent.

Factoring out gasoline prices, overall retail sales would have risen by 0.8 per cent.

Cash from the US government stimulus checks helped push U.S. retail sales up at twice the rate expected in May. A full percentage point gain in retail sales in May was reported by the US Commerce Department. Higher gasoline prices gave a lift to service station sales last month, but even with those stripped out, sales rose 0.8 percent, the biggest gain in a year. Consumers purchased clothing from sporting goods to electronics.

A wide variety of retailers enjoyed a good May, including the biggest increase at department stores and other general merchandise stores in a year. Discounters like Wal-Mart and Target, saw the largest increase in 14 months. People who could afford it bought electronics or clothes.

The May increase was double what economists had been expecting. This indicated that the economy is receiving a major boost from the $50 billion in economic stimulus payments the government sent out in May We do not accept what Ian Shepherdson, chief U.S. economist at High Frequency Economics said that consumers have returned to their free-spending ways despite weak consumer-confidence readings and the credit crunch.

Via our research in Customer Experience Measurement we are seeing cautious consumers who are shopping for value and believe it or not, a pleasant in-store and online shopping experience.

We favour what Nigel Gault, an economist at Global Insight, a forecasting firm said "The May retail sales report has dramatically changed the landscape,", wrote in a note. "Consumer spending has held up much better than gloomy sentiment surveys would suggest." Smart retailers take note!

As the attitudes of consumers toward value and spending change, we expect to see consumers looking for value to a much greater degree over the next six months.

Issues of greater competition for consumer dollars will move to the fore.

Retailers are far more concerned than ever, about understanding the reasons for buying with them versus the competition, with an eye toward tipping more of the balance in their favor.

Retailers are beginning to work harder to grab and keep every consumer dollar from competitors.

See: http://afp.google.com/article/ALeqM5iLEvyX9FwCjOgVTYPI8yvv3NwBKA for a complete report.

Saskatchewan's booming resource economy helped push retail sales in the province up by 13 per cent in 2007 to $13 billion, or double the growth of 2006, according to a new report released Monday by Statistics Canada.

The province's retail sales growth rate was more than double the 5.8 per cent national rate of expansion last year. Across the country, retailers sold an estimated $412 billion worth of goods and services in 2007.