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Consumer spending increased in May

Americans stepped up their retail spending last month, a sign that low unemployment and modest wage gains are encouraging consumers to shop.

The Commerce Department said Friday that retail sales rose 0.5 percent in May, after a smaller gain of 0.3 percent the previous month. April’s figure was revised up from an earlier estimate that showed a decline.

The figures suggest that Americans remain confident enough in the economic outlook to spend.

Sales at electronics stores jumped 1.1 percent and rose 0.7 percent at auto dealers. Sales in a category that mostly includes online retailers rose 1.4 percent.

Retail sales have been choppy this year. But with the unemployment rate at a five-decade low of 3.6 percent and wage gains easily outpacing inflation, most analysts expect consumer spending to keep growing at a decent pace.

Still, the economy is forecast to slow in the April-June quarter.

Retail spending was healthy in many categories. Restaurants and bars reported that spending rose 0.7 percent. Sporting goods and hobby stores saw sales rise a strong 1.1 percent.

— Associated Press

WALL STREET
Chewy soars during market debut

PetSmart-controlled Chewy Inc. surged in its first day of trading after raising $1.02 billion in an initial public offering, as investors bet that pet owners will do more of their shopping online for items from cat food to dog sweaters.

Chewy’s shares rose as much as 88 percent in the first hour of trading Friday from the $22 offer price. Shares opened at $36 and were up 59 percent to close at $34.99.

PetSmart acquired Chewy in 2017, paying about $3 billion for the company.

— Bloomberg News

AUTO INDUSTRY
VW workers in Tenn. vote against union

Workers at Volkswagen’s plant in Chattanooga, Tenn., have voted against forming a union.

A win would have offered the United Auto Workers its first fully organized, foreign-owned auto assembly plant in the traditionally anti-union South.

The vote of hourly workers began Wednesday and concluded Friday. The German automaker said Friday night that preliminary results show employees voted against representation 833 to 776.

Gov. Bill Lee, U.S. Sen. Marsha Blackburn and other top Republicans urged a “no” vote. In 2014, then-U.S. Sen. Bob Corker and then-Gov. Bill Haslam helped workers in the plant to vote against UAW representation.

UAW officials questioned why Chattanooga should differ from Volkswagen’s other major, union-represented plants worldwide, or the General Motors plant in Spring Hill, Tenn., with 3,000 UAW-represented workers.

— Associated Press

Also in Business

Former students at ITT Technical Institute will not have to pay $168 million they still owe on private loans from an affiliated lender to attend the now-defunct for-profit college, under a regulatory settlement announced Friday. Student CU Connect CUSO, created in 2008 to fund and manage loans for ITT students, reached the settlement with the Consumer Financial Protection Bureau, 44 states and the District to resolve claims over its alleged shoddy business practices. The accord also requires CUSO to stop collecting on loans and to ask consumer reporting agencies to delete its loans from students’ credit profiles. ITT Educational Services, which ran ITT Technical Institute, closed its roughly 130 campuses and filed for bankruptcy in September 2016. The closure affected about 35,000 students and 8,000 employees.

U.S. industrial production improved in May, but manufacturers showed weakness despite eking out a slight gain. The Federal Reserve said Friday that industrial output, which includes factories, utilities and mines, rose 0.4 percent in May, after tumbling 0.4 percent in April. Manufacturing output increased just 0.2 percent last month, not enough to overcome declines in prior months. Factory production is down 1.5 percent since the end of 2018.

U.S. consumer sentiment has weakened in June, and long-term inflation expectations dropped to the lowest on record as the outlook for the economy dimmed amid President Trump's trade war. The University of Michigan's preliminary sentiment index fell to 97.9 from 100 in May. The gauge of current conditions increased to 112.5, and the expectations index dropped to 88.6, according to Friday's report.

— From news services