ARLINGTON, Va.—Total retail sales fell by 0.3% in May after having increased 0.7% in April and increasing another 1.2% in March.
“A sizable reduction in automobile spending more than offset the increased amount drivers are paying at the pump,” stated. NAFCU Chief Economist and Vice President of Research Curt Long. “Spending at appliance and home furnishings stores also declined in May, tracking with slowing home sales.”
Sectoral performance was mixed in May, according to new federal data. Gasoline stations were the biggest winners with 4.0% growth in sales, followed by food and beverage stores (1.2%), food services and drinking places (0.7%), and sporting goods/hobby/musical instrument/book stores (0.4%).
Meanwhile, motor vehicle and parts dealers were May's biggest losers (-3.5%), followed by electronics and appliance stores (-1.3%), miscellaneous store retailers (-1.1%), nonstore retailers (-1.0%), and furniture stores (- 0.9%).
Year-over-year growth in retail sales were up 8.5% during the month. Control group sales – which excludes auto, gas, and building material categories – were up 8.4% from a year ago.
From Goods to Services
“To be fair, some of the decline in retail sales growth reflects a pivot from goods to services spending, as retail sales primarily track the former,” added Long. “But the drop has been swift and is still understated by the numbers, given that retail sales figures are not adjusted for inflation. It is clear the economy is slowing even as the Fed rushes to tighten monetary policy in order to rein in inflation. The risk of a policy mistake is growing, along with the risk of recession.”