US retail sales fall for second month straight in May
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The news: US retail sales fell for a second consecutive month in May, signalling that concerns around tariffs and their costs are prompting American consumers to pull back on spending.
The numbers: The US Commerce Department’s Census Bureau said that retail sales fell 0.9% to USD715.4 billion ($1.09 billion) in May, after a downwardly revised 0.1% dip in April. Reuters economists had forecast that retail sales would decrease 0.7%. The drop was the largest decline since the start of the year.
The decline was driven in part by lower levels of auto purchases, after many Americans had scrambled to buy cars ahead of Trump’s major tariffs, hoping they would avoid higher prices.
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.4% in May. Seven of the report’s 13 categorised posted declines, with spending at restaurants and bars, the only service-sector category in the retail report, fell by the most since early 2023.
The context: The May declines were tied to temporary drags as tariff front-running cooled compared to the month prior. Officials from the Federal Reserve have said they’re waiting to see how Trump’s policies will impact the economy, and are widely expected to keep interest rates on hold when they gather this week.
The source: US Census Bureau
