U.S. retail sales increased just 0.1% in May from the prior month, according to Commerce Department data, settling in lower than the 0.3% gain that economists had previously predicted. Combined with persistently high inflation and elevated interest rates, this data indicates that American shoppers are pulling back on spending.
Gas station sales saw the biggest drop, coming in at a 2.2% decline for the month. Once removed, sales were up by 0.3% for May. However, furniture stores and retailers that sell building materials and garden equipment fell 1.1% and 0.8%, respectively.
One place where Americans were still willing to shell out the money: specialty stores that sell musical instruments, books and sporting goods, where sales increased by 2.8%.
“Spending is cooling back towards a more sustainable pace,” said Joseph Brusuelas, chief economist at RSM US, in an interview with CNN. “It’s important we don’t confuse a slower pace of spending with the economy turning over, because that’s clearly not happening.”
