NEW YORK (AP) -- Shares of specialty retailers climbed Thursday after the government issued a double shot of good news about jobs and consumer spending.
Retailers have clawed their way out of the recession, sometimes at a steep price, as shoppers have been unwilling to open their wallets until they see deep discounts. That has cut into margins at retail stores, who have made a priority of maintaining the flow of people coming through their doors.
A U.S. report on economic growth Tuesday raised new concerns about consumer spending. The Commerce revised its estimate substantially downward for first quarter growth.
Most of the revision was due to a drop in consumer spending, to an annual rate of 2.6 percent, which was sharply lower than the 3.4 percent rate estimated last month.
Yet consumer confidence has been rising gradually as the housing market, as well as the prospect of finding or keeping a job, improves.
Government data Thursday provided retailers with more to be optimistic about.
The Commerce Department said that consumer spending rose 0.3 percent last month, nearly erasing a similar decline in April. That is likely due, at least partially, to a slight uptick in pay, with income rising 0.5 percent. And the Labor Department reported that the number of Americans seeking unemployment benefits fell 9,000 to a seasonally adjusted 346,000 last week. The four-week average, a less volatile figure, dropped 2,750 to 345,750. That's near the five-year low of 338,000 that the average touched last month.
Retailers have already seen their stock recover throughout most of the year. This month, the Gap, Pacific Sunwear, Wet Seal and Express have hit 52-week highs. Abercrombie & Fitch and Buckle hit new highs last month.
Thursday's economic data pushed specialty retail stocks higher still, and the sector was one of the biggest gainers on the Standard & Poor's 500 index.
Here's how some specialty retailers are faring in afternoon trading:
Urban Outfitters Inc. added 57 cents to $40.09.
American Eagle Outfitters rose 15 cents to $18.04.
Aeropostale Inc. gained 57 cents, or 4.5 percent, to $13.38.
Buckle Inc. added 49 cents to $52.03.
Gap Inc. climbed 29 cents to $41.91.
Wet Seal Inc. rose 2 cents to $4.77.
Abercrombie & Fitch Co. gained 31 cents to $44.63.
Express Inc. added 39 cents to $20.84.