Retail sales rise a meager 0.1% in May from April as still inflation curbs spending
Consumers barely increased spending in May from April as still high inflation and high interest rates curbed spending
NEW YORK — Consumers barely increased spending in May from April as still high prices on groceries and other necessities and high interest rates curbed spending.
Retail sales rose 0.1% in May, below the pace that economists projected, according to the Commerce Department. And April sales were revised downward — a 0.2% decline, from unchanged. Sales rose 0.6% in March and 0.9% in February. That comes after sales fell 1.1% in January, dragged down in part by inclement weather.
Excluding gas prices and auto sales, retail sales rose the same amount.
Retail sales in May, in part, were depressed by falling gas prices. Excluding sales from gasoline, sales were up 0.3%. The national average price for a gallon of unleaded gasoline was $3.45 as of Monday; a month ago, it was $3.59, AAA said.
Government retail data isn't adjusted for inflation, which was unchanged from April to May, according to the latest government report. High inflation helps to inflate retail sales figures.
Still, economists said the report reflected an increasingly cautious consumer. But they point to a silver lining: a weaker-than-expected retail sales report increases the likelihood that the Federal Reserve will start to cut interest rates in a few months.
“Consumer spending is cooling in a fairly orderly fashion,” said Jeffrey Roach, chief economist for LPL Financial in Charlotte, North Carolina. But he added, «So far, the economy could pull off a soft landing, especially if the Fed is quick to adjust policy as conditions change.»
The report showed mixed performances for various categories. While auto and vehicle dealer sales rose, areas
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