Retail sales barely rose last month as Americans burdened by persistently sticky rates of inflation increasingly pull back on spending. Data released on Tuesday by the Commerce Department showed that the value of retail purchases rose 0.1% in May — below analyst estimates of 0.
2%. Retail sales for the previous month were revised downward to 0.2%.
Of the 13 categories listed by the Commerce Department, five of them showed declines as gasoline prices dropped and furniture stores hawked Memorial Day sales, according to government data. The lackluster numbers show a marked downturn in consumer spending after more robust figures earlier this year. Economists now expect spending to continue at a moderate pace as US shoppers grapple with stubborn inflation and a weakening job market.
“With ...
consumer confidence plummeting again, maybe households aren’t quite as impervious to higher interest rates as we were beginning to believe,” Paul Ashworth, chief North America economist at Capital Economics, said in a note to clients. When excluding gasoline, retail sales in May rose 0.3%.
Year over year, retail sales in May were up 2.3%. The sluggish retail sales put a damper on Wall Street as the main indexes reported slight gains.
The Dow Jones Industrial Average was up 0.03% at around noon on Tuesday while the S&P 500 was up 0.12%.
The tech-centric Nasdaq was trading down 0.11% . Consumer spending accounts for some two-thirds of all economic activity so any signs of a slowdown coul.