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Driven by autos, May retail sales accelerate

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WASHINGTON (6/13/14)--Retail sales only climbed 0.3% in May, but as April's numbers were revised significantly higher, May's increase appears a little stronger ( Economy.com June 12).
 
Auto sales continue to lead the way--including a double-digit jump from auto dealers--pushing retail growth overall 4.3% higher than May 2013.  
 
Though, without autos in the mix, sales were up only 0.1%, as modest declines were common throughout the rest of the market. Aside from vehicles, building material sales were the only other bright spot.
 
"Overall sales have been up more than 4% from a year earlier for three straight months for the first time since last summer," said Scott Hoyt, Moody's analyst ( Economy.com ). "Sales have clearly regained the momentum they lost during the winter."
 
Meanwhile, consumers are using credit cards to make their purchases at a higher rate than they were last year, according to numbers released by First Data Corp. Thursday.
 
Spending with credit cards swelled 4.2% year-over-year in April and increased 1.7% between April and May. Overall, retail purchases in May experienced its best month since last year, driven by a 6.7% jump in credit card spending on building materials and supplies ( ATM Marketplace June 11).
 
"Credit card spending growth continued to be strong and led all other payment types," said Krish Mantripragada, senior vice president of information and analytics for First Data. "The surge in spending growth at hotel and travel merchants, building material and home furnishing merchants--where credit is the primary payment tool--was a major driver supported by easing lending standards and payroll growth."

News of the Competition (06/13/2014)

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  • CHICAGO (6/13/14)--On June 10, the Federal Deposit Insurance Corp. filed suit against JPMorgan Chase & Co. and BMO Harris Bank to claim $265 million in federal tax refunds owed to failed FBOP Corp. banks ( Crain's Chicago Business June 12). The Oak Park, Ill.-based bank was seized by the FDIC in 2009 with most of the assets and deposits--with the exception of the tax refunds--being sold to U.S. Bank in Minneapolis. With a $246 million loan, JPMorgan was the biggest lender to FBOP, which at its peak held more than $19 billion in assets. Prior to its closure, FBOP was sued by BMO Harris to recover a $43 million loan. JPMorgan and BMO Harris want to recoup some of what they are owed with FBOP's tax refund. The FDIC estimates that the FBOP bank failure cost the insurance fund $2.5 billion ...