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A Commerce Department report revealed that the Bush government stimulus plan is working, as retail sales surged to their highest level in six months.

Retail sales in the U.S. for May increased by a huge 1 percent, about double what was looked for by economists. The big increase involved a large variety of retailers, led by general merchandise and department stores. It's a good sign for retailers that they should enjoy at least several more months of strong sales, as less than half of the stimulus payments have been sent out so far.

Other good news for the economy is that sales for March and April have also been revised upwards, possibly pointing to a slowdown but not a recession in the future.

"For now at least, the tax rebates are trumping the higher energy and food costs and the other problems consumers are facing," said Mark Zandi, chief economist at Moody's Economy.com. "People are spending the money and not saving it or paying down debt."

Another interesting statistic is even will all the griping about gas prices, consumers continue to spend at the pump, as gasoline sales increased by 2.6 percent, with 0.8 percent of that unrelated to increased prices. That's solid growth no matter how you look at it.

That suggests that while people may be verbally complaining, their actions are different than their talk; they continue to spend significant dollars in the U.S. economy.

The feeling is the strong results concerning retail sales probably makes the idea of the Federal Reserve cutting interest rates less likely. As a matter of fact, it make signal the need to increase interest rates as the focus goes back to inflation.

Other than department and discount stores, other strong sales occurred with appliances, building materials, health care, electronics and sporting goods.