U.S. retail sales in May fell for 1st time in 5 months
U.S. retail sales in May saw their first drop in five months, as rampant inflation continued to terrorize consumers and upend markets, multiple outlets reported Wednesday.
The unexpected 0.3 percent plunge was driven in large part by a sharp drop in vehicle sales "due to high prices, low inventory and rising interest rates on car loans," notes The Wall Street Journal. Meanwhile, however, "spending at gas stations climbed 4 percent, likely reflecting higher fuel prices in the month," Bloomberg adds.
Consumers also tightened spending on goods like furniture, electronics, and online purchases. Such figures suggest U.S. demand for merchandise is "softening," Bloomberg writes, which might be a result of high inflation or perhaps just a greater affinity for services.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The figures arrived prior to the Federal Reserve's decision to raise interest rates by three-quarters of a percentage point, the central bank's largest hike since 1994.
"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," Sal Guatieri, senior economist at BMO Capital Markets in Toronto, told Reuters.
Several economists downgraded forecasts for real spending and GDP after reviewing the Commerce Department figures, per Bloomberg. The May report also showed data for April revised lower to reflect sales for the month increasing 0.7 percent, instead of 0.9 percent as was previously reported.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
The week's best photos
In Pictures A flooded island, a ballistic missile, and more
By Anahi Valenzuela, The Week US Published
-
Who actually needs life insurance?
The Explainer If you have kids or are worried about passing on debt, the added security may be worth it
By Becca Stanek, The Week US Published
-
Sexual wellness trends to know, from products and therapies to retreats and hotels
The Week Recommends Talking about pleasure and sexual health is becoming less taboo
By Theara Coleman, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published