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Economy in Brief

U.S. Retail Spending Disappoints Across-the-Board
by Tom Moeller June 11, 2010

U.S. consumers took a break during May from their shopping spree after the recession's end. Retail sales declined 1.2% last month following an upwardly revised 0.6% April rise. The drop disappointed Consensus expectations for a 0.2% increase. Nevertheless, sales have risen 5.7% since the recession's end last June.

Despite last month's already reported increase in unit sales, retail purchases of motor vehicles fell 1.7% during May. The y/y gain of 12.6%, however, is close to the gain in unit purchases. Finally, sales at gasoline service stations fell 3.3% (+20.2% y/y). It was further evidence that higher prices are discouraging gas usage since prices fell just 0.4% m/m.

Nonauto sales declined 1.1% after the 0.6% April increase which was revised up slightly. The decline also disappointed Consensus expectations for a 0.1% uptick. The shortfall was paced by a 9.3% drop (+3.1% y/y) in sales at building materials and hardware stores.

Also disappointing was "core" discretionary spending. Apparel store sales declined 1.3% (+4.1% y/y) after a 0.7% April decline. General merchandise store sales also fell by 1.1% following a 0.2% slip during April. Working the other way, sales of furniture, home furnishings & electronics rose 0.8% (5.2% y/y) and recovered most of the April decline. Furniture sales alone rose 1.0% (5.3% y/y) while a 0.6% increase (5.0% y/y) in sales of electronics & appliances recovered all of the April drop. Sales by internet & catalogue vendors ticked up 0.2% (15.2% y/y) but April sales were revised sharply higher and rose 2.5%. Food service sales ticked

The retail sales data are available in Haver's USECON database.

The latest Beige Book covering regional economic conditions from the Federal Reserve Board can be found here .

May April March May y/y 2009 2008 2007
Total Retail Sales & Food Services (%)

-1.2 0.6 2.1 6.8 -6.3 -1.0 3.3
Excluding Autos -1.1 0.6 1.2 6.1 -5.1 2.3 3.9
Non-Auto Less Gasoline -0.8 0.6 1.2 4.4 -1.9 1.2 3.5
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