US Retail Sales fall by 0.3% MoM in May

Retail Sales in the US fell by 0.3% MoM in May, versus expectations for a 0.2% rise and following a 0.7% MoM gain in April (revised down from 0.9%), data released by the US Census Bureau on Wednesday showed. Meanwhile, Core Retail Sales rose by 0.5% MoM, below the expected gain of 0.8%, while April’s figure was also revised lower to a gain of 0.4% from 0.6% previously. The Retail Control, meanwhile, was stagnant in May and remained unchanged versus expectations for a 0.5% rise, while April’s figure was revised lower to a 0.5% gain from 1.0% previously. 

The figures suggest that Americans’ demand for merchandise is softening, which could reflect the impact of the fastest inflation in 40 years or greater preference to spend to on services like travel and entertainment. As price pressures become more entrenched in the economy, spending will likely ebb either due to higher prices, higher interest rates, or both.

Several economists downgraded their forecasts for real spending and gross domestic product following the report.