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Economy in Brief

U.S. Retail Sales Dip Unexpectedly in May
by Tom Moeller  June 15, 2022

• Auto sales fall sharply.

• Gain in nonauto spending fueled by gasoline and food.

• Spending elsewhere is modest.

Consumers faced higher gasoline prices, higher interest rates and rising inflation in May. For many products, limited availability also was an issue. Consequently, retail sales declined 0.3% (+8.1% y/y) last month following a 0.7% April rise, revised from 0.9% reported initially. It was the first decline in five months. The Action Economics Forecast Survey expected a 0.2% rise.

Retail sales excluding motor vehicles improved 0.5% in May (11.2% y/y) after increasing 0.4% in April, revised from 0.6%. A 0.8% increase had been expected.

Motor vehicle sales weakened 3.5% last month (-3.7% y/y) after a 1.8% gain during in April. The decline contrasts with a 12.1% decline in unit light vehicle sales. Gasoline sales jumped 4.0% in May with higher prices (43.2% y/y), following a 1.9% decline.

Sales in the retail control group, which excludes autos, gas stations, building materials & food services, were little changed (+6.2% y/y) after increasing 0.5% in April, revised from 1.0% m/m. These sales are used in the construction of personal consumption expenditures in NIPA accounts.

Sales' performance varied by category. Sales via the internet declined 1.0% (7.0% y/y) and reversed the 1.0% April rise. Furniture & home furnishings sales fell 0.9% (+1.9%) after improving 1.6% in April. Sales of electronics and appliances weakened 1.3% (-4.5%) after rising 1.8% in April. Apparel stores edged 0.1% higher (6.1% y/y) after increasing 0.5%. General merchandise store sales also rose 0.1% (2.5% y/y) after falling 0.5%. Within that category, department store sales rose 0.9% both m/m and y/y after rising 0.4% in April. Sporting goods store sales improved 0.4% (-0.2% y/y) after a 0.2% April gain. Sales of building materials & garden equipment edged up 0.2% (6.4% y/y) and reversed April's decline.

In the nondiscretionary sales categories, food & beverage store sales rose 1.2% last month with higher prices (7.9% y/y) after easing 0.1% in April. Health & personal care store sales weakened 0.2% (+4.8% y/y) after two months of roughly 1.0% increase.

Restaurant sales increased 0.7% in May (17.5% y/y) following three straight months when sales surged an average 3.8% per month.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

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