WASHINGTON: U.S. retail sales unexpectedly fell in May as motor vehicle purchases declined amid rampant shortages, and record high gasoline prices pulled spending away from other goods.
The first drop in sales in five months reported by the Commerce Department on Wednesday also suggested that high inflation was starting to hurt demand. It followed in the wake of major retailers like Walmart and Target cutting their profit forecasts because of cost pressures.
Still, the weak retail sales will not divert the Federal Reserve from its aggressive monetary policy tightening path to bring back inflation back to its 2% target. The U.S. central bank is expected to raise its policy interest rate later on Wednesday for a third time this year, with an increase of 3/4 of a percentage point seen as likely.
"While high personal savings and strong job and wage growth help, consumers are facing stiff headwinds from four-decade high inflation, rapidly rising borrowing costs, and the bear market in equities," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.
"The Fed will need to see a sustained period of weakness in domestic demand and likely labor markets before breathing a sigh of relief on the inflation front."
Retail sales dropped 0.3% last month. Data for April was revised lower to show sales increasing 0.7% instead of 0.9% as previously reported. Economists polled by Reuters had forecast retail sales gaining 0.2%, with estimates ranging from as low as a 1.1% decline to as high as a 0.5% increase.
Retail sales are mostly goods, and are not adjusted for inflation. Sales rose 8.1% on a year-on-year basis.
The national average price of gasoline jumped to an all-time high of $4.439 per gallon in May, according to data from the U.S. Energy Information Administration. Prices at the pump have since risen above $5 per gallon.
The decline in monthly retail sales was led by receipts at auto dealerships, which dropped 3.5% after increasing 1.8% in April. Online store sales fell 1.0%. There were declines in sales at electronics and appliance retailers as well as furniture stores.
Sales at building material, garden equipment and supplies stores gained 0.2%. Receipts at sporting goods, hobby, musical instruments and book stores increased 0.4%. Clothing store sales edged up 0.1%. Sales at services stations at gasoline surged 4.0%. Excluding gasoline, retail sales dropped 0.7%.
The decline in retail sales also reflected a gradual rotation of spending from goods to services. Receipts at bars and restaurants, the only services category in the retail sales report, increased 0.7% last month.
Annual consumer prices increased by the most in nearly 40-1/2 years in May. With inflation eroding wage gains, consumers are turning to savings, accumulated during the COVID-19 pandemic, and taking on debt to maintain spending.皇冠官方app声明:该文看法仅代表作者自己，与本平台无关。转载请注明：皇冠体育官网开户（www.hg108.vip）_U.S. retail sales post first decline in five months as inflation bites