HomeTop U.S. NewsRetail Sales in the U.S. See Weaker Increase Than Expected

Retail Sales in the U.S. See Weaker Increase Than Expected

The report on retail sales in the U.S. for May Commerce Department has shown a weaker increase compared to expectations. The sales rose just 0.1%, while Dow Jones expected to see a 0.2% increase, and economists polled by FactSet estimated a 0.3% increase.

Retail sales bounced back from April, which featured a 0.2% decline, while also increasing 2.3% on a year-over-year basis. However, with cars and gas excluded, the retail sales actually decreased by 0.1% in May compared to an estimated 0.4% jump.

The gas contributed to the overall weaker increase as sales at gasoline pumps declined by 2.2% compared to April. Furniture sales were 1.1% down, while specialty store sales increased by 2.8%.

The most recent slowdown in retail sales is showing that consumers are continuing to feel the pressure of inflation and high interest rates that have caused rising prices.  

“Consumer spending is slowing because real incomes growth is moderating and because some consumers are becoming credit constrained amid elevated interest rates and rising credit card utilization,” Michael Pearce, deputy Chief US economist at Oxford Economics, told clients in a note shared by Yahoo Finance.

Some relief might be coming later this year as promising inflation data could lead to cuts in interest rates. The Federal Reserve announced last week that it plans one rate cut in 2024 although economy experts say that two cuts are real possibility.

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