Stimulus checks effective, government says
Washington – The stimulus checks are working. A big increase in retail sales signaled that people are spending their rebate payments, helping to ward off a serious economic slump, at least for now.
The Commerce Department reported yesterday that retail sales soared 1 percent last month, double what had been expected. It was the largest increase since November and represented strong sales at a variety of retailers including the biggest increase at department stores and other general merchandise stores in a year.
The May increase, double what economists had been expecting, provided the strongest evidence yet that the economy is getting a major boost from the $50 billion in economic stimulus payments the government sent out by the end of May, slightly less than half of the $106.7 billion scheduled to be sent out this year.
The Bush administration is hoping the stimulus payments will offset the gloom from a prolonged slump in housing, a severe credit crisis, soaring energy bills and rising layoff notices and keep the country out of a deep recession.
