Economists were forecasting 0.4 growth in retail sales for May. Excluding the auto sector, retail sales grew by 0.3 percent.
Retail sales make up 30 percent of consumer spending in the U.S. economy.
The auto industry has benefited from the Federal Reserve’s monetary stimulus program of holding down interest rates to encourage Americans to spend money in the economy despite facing higher taxes and government budget cuts.
Cars and light trucks sold at an annualized pace of 15.2 percent, showing that spending levels in the auto industry have safely returned to pre-recession levels.
Last week U.S. clothing retailer Gap reported a 7 percent increase in 2013 May sales compared with May 2012.
Weekly Jobless Claims
According to the Department of Labor, weekly jobless claims dropped 12,000 to 334,000.
Last week, the May jobs report showed that U.S. payrolls grew by 175,000, beating consensus estimates of 165,000.