U.S. Retail Sales Unexpectedly Dip Amid Sharp Pullback In Auto Sales
(RTTNews) - Reflecting a sharp pullback in auto sales, the Commerce Department released a report on Wednesday showing an unexpected decrease in U.S. retail sales in the month of May.
The report showed retail sales fell by 0.3 percent in May after climbing by a downwardly revised 0.7 percent in April.
Economists had expected retail sales to edge up by 0.2 percent compared to the 0.9 percent increase originally reported for the previous month.
The unexpected decrease in retail sales came as sales by motor vehicle and parts dealers plunged by 3.5 percent in May after jumping by 1.8 percent in April.
Excluding the steep drop in sales by motor vehicles and parts dealers, retail sales rose by 0.5 percent in May following a 0.4 percent increase in April. Ex-auto sales were expected to advance by 0.8 percent.
A 4.0 percent spike in sales by gas stations contributed to the increase in ex-auto sales along with a 1.2 percent jump in sales by grocery stores.
On the other hand, sales by electronic and appliance stores, miscellaneous store retailers and non-store retailers showed notable decreases.
Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, were unchanged in May after rising by 0.5 percent in April.
"By some measures, consumers are the gloomiest they've ever been but it doesn't mean they will stop spending," said Lydia Boussour, Lead U.S. Economist at Oxford Economics.
She added, "With inflation reaching new heights and prices at the pump soaring, consumers will likely continue to reshuffle their spending priorities and allocate more of their budget toward services and pricier necessities such as gas, food and shelter."
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