Retailers have an opportunity to benefit from the strengthening consumer, especially if the housing market rebounds, one economist said. ‘When you look at spending on household related items like building materials, garden supplies and electronics, that was running at about 18-19 percent of total retail spending before the recession,’ said Steve Blitz, chief economist of ITG. ‘It’s down now to around 14 percent, but if the housing market picks-up, there’s a lot of room on the upside for these retailers to capture consumer dollars.’ Retail sales rose 1.2 percent in May, the Commerce Department said on Friday, falling short of the 1.3 percent economists at Econoday expected. But the rise was much healthier than April’s unchanged reading, which was revised up to 0.2 percent. Building materials also saw a 2.1 percent increase during the month. Shares of Home Depot (HD) and Lowe’s (LOW) rose about 0.5 percent in midday trading on Thursday. While Blitz sees opportunity in the retail sector, TheStreet’s Jim Cramer, portfolio manager of Action Alerts PLUS charitable trust, said retail stocks have been ‘inconsistent’ lately, referencing names like discount retailer Five Below (FIVE) and athletic clothing company Lululemon (LULU) in a Real Money column on Wednesday. Meanwhile, spending on autos rose 2.1 percent in May. ‘I think the number we saw in May is too high to be sustainable,’ though Blitz said the positive trend in auto sales is likely to continue, hence the encouraging performance in auto stocks this year. Shares of General Motors (GM) rose 2.6 percent year-to-date, while Toyota Motors’ (TM) ADR shares increased 7.7 percent.
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