Consumer Spending Posts Biggest Increase in Six Months

WASHINGTON (AP) - The government says retail sales posted the biggest increase in six months in May. The increase came as economic stimulus payments helped offset strong headwinds, including rising gasoline prices.

The Commerce Department reports retail sales jumped 1 percent last month. Department stores and other general merchandise stores had the best showing in a year.

The May increase was double what economists expected, indicating that the economy is getting a major boost from the 50 million dollars in economic stimulus payments the government sent out in May.

In another report, the Commerce Department says business inventories grew by half a percent in April, more than double the rise in March and the best showing since January.  Also, the Labor Department said new applications for jobless benefits rose by 25,000 last week to 384,000.