U.S. customers have cut their spending in May more than predicted. According to data shared by US Commerce Department, the retail sales have dropped by 0.3 percent in May compared to an expected 0.2 rise.
U.S. retail sales have spiked each month since January, including a 0.7 percent (revised from 0.9 percent) increase to $674.7 billion in April. The trend was expected to continue in May, but Americans surprisingly decided to operate on a tighter budget and spend $672.9 billion.
The decline can be attributed to fears concerning surging inflation as well as soaring gasoline prices that have taken the nation by storm. The average gas price managed to stay below $5 per gallon last week, but that mark has been breached this week and currently stands at $5.014.
It was actually the slow demand for car purchases that contributed the most to the drop in retail sales. The data shows that sales of vehicles and car parts have been down 3.5 percent from April. Excluding the automotive sector, retail sales actually increased by 0.5 percent in May.
On the other hand, spending at the gas stations saw a big jump of around four percent, but some of it was due to an increase in gas prices. Grocery stores and department stores saw their sales increase by 1.2 percent and 0.9 percent, respectively.
