US May Retail Sales Down 0.3%... First Decline in 5 Months

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Hyunjung] U.S. retail sales in May declined for the first time in five months due to weak automobile and high-end goods purchases.

Bloomberg News reported on the 15th (local time), citing data from the U.S. Department of Commerce, that May retail sales fell by 0.3% compared to the previous month. This marks a reversal from the growth trend seen from January to April, turning into a decline after five months.

Additionally, according to the median estimate from a Bloomberg survey of economists, overall retail sales increased by 0.1% month-over-month, and sales excluding automobiles rose by 0.7%. Due to the effects of rising prices, inventory reductions, and higher interest rates, automobile sales dropped by 3.5% in May.

Retail sales excluding automobiles and gasoline increased by 0.1% in May, marking the smallest gain in five months. Gasoline consumption rose by 4%, which the news agency interpreted as reflecting higher oil prices. Grocery store sales increased by 1.2%, and restaurant revenues grew by 0.7%. However, since the released figures were not adjusted for inflation, the increases may reflect price rises rather than increased purchasing activity. Real spending data for May is scheduled to be released later this month.

The news agency explained, "These figures suggest that Americans' demand for goods is declining," adding, "This may reflect the impact of the fastest inflation in 40 years or a preference shift toward spending on services such as travel and entertainment." It also observed, "As price pressures become more entrenched, spending is expected to decrease due to higher prices, higher interest rates, or both."

Alex Fell, an economist at Mizuho Financial Group, explained, "The inflation-adjusted figures for goods consumption being negative implies that the real-time GDP current figures are likely to decline significantly."

Meanwhile, this announcement came ahead of the U.S. Federal Reserve's decision to raise interest rates by 0.75 percentage points, the largest increase since 1994.

This content was produced with the assistance of AI translation services.