For the second month in a row, consumers have reduced their retail spending. The Census Bureau reported that May retail sales fell 0.2 percent, following a similar fall in April. There were some exceptions. Motor vehicle sales, for instance, rose 0.8 percent, which is a significant improvement after some weaknesses in March and April. Excluding autos, retail sales would have fallen by 0.4 percent. Other sectors with stronger sales included nonstore retailers (up 1.3 percent), clothing and accessories (up 0.9 percent), electronics and appliances (up 0.8 percent) and furniture and home furnishings (up 0.4 percent).
Reduced petroleum prices helped to reduce the sales value at gasoline stations, which was down 2.2 percent. This follows a 1.4 percent decline in gasoline station sales in April, but it also represents the other side of rising sales (and prices) experienced in January, February, and March. If autos and gasoline sales were excluded, retail sales would have fallen by 0.1 percent.
Other decliners included building materials (down 1.7 percent), general merchandisers (down 0.5 percent), food and beverages (down 0.2 percent) and restaurants (down 0.2 percent).
Overall, these numbers suggest that Americans are pulling back on the spending somewhat, even when you adjust for lower gasoline prices. There are some exceptions to this, such as motor vehicles, but it is clear that consumer anxieties are having an impact, at least in the short term. With that said, the longer-term trend remains positive, with retail sales up 5.7 percent year-over-year. Consumers have also been the main driver for real GDP growth, as seen in its most recent revision.
Chad Moutray is chief economist, National Association of Manufacturers.
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