April retail sales rose 1.3%, substantially exceeding expectations of 0.9%. Auto sales were a major driver of the strong result, with sales rising 3.2% from March. Ex-autos, April retail sales rose 0.8%. Apparel and restaurants had notably higher sales. Building materials and gardening equipment were the only components to decline, possibly suggesting slower growth in the residential investment market.

Initial jobless claims rose 20,000 from the week of May 7th to a total of 294,000, the highest number of jobless claims since February. Continuing claims rose by 37,000. The spike in initial claims raises concerns about the direction of the labor market in the coming weeks.

Consumer sentiment lurched upwards from the April survey, up to 95.8 from 89, reaching the highest level since last June. The improved sentiment was due to increasing income gains and lower inflation expectations. Inflation expectations fell steeply by 0.3%.

This week, several retailers reported disappointing quarterly results. Macy’s (M) reduced its profit forecast following earnings of $0.40 per share and a 7.4% decline in sales, in part due to a strong dollar discouraging purchases by tourists. Kohl’s (KSS) reported a drop of 3.9% in sales and increased costs. The Gap (GPS) reported a 6.5% decline in sales for March. Michael Kors, Nordstrom, and Ralph Lauren all declined in the wake of their peers’ disappointing reports.

Disney (DIS) reported a disappointing 2% decline in sales due to poor results from its cable networks, parks, and consumer products units. Particularly concerning was ESPN’s loss of subscribers, raising questions about how the company will weather the current cord-cutting trend.

Apple (AAPL) fell to a two-year low, falling 2.35% to $90.34 as concerns grew about the slowing demand for iPhones, Mac computers, tablets, and the uncertain future of the Apple Watch. In Thursday’s trading session following Apple’s decline, Google became the largest public company by market cap.