NEW YORK (AP) – Americans trimmed their spending unexpectedly in May compared with a month before, underscoring how surging inflation on daily necessities like gas is causing them to be more cautious about buying discretionary items.
U.S. retail sales slipped 0.3% last month, down from a revised 0.7% increase in April, the Commerce Department said Wednesday.
A sharp decline in auto sales, largely because of higher prices and shortages of new car inventories, depressed the retail sales figure. Excluding autos, retail sales actually rose 0.5% last month. But excluding sales from gas stations, retail sales slipped 0.7%, showing how higher prices at the pump are accounting for more of shoppers’ overall spending.
The report also highlighted shoppers’ pullback on some of the products that were in hot demand during the height of the pandemic but are now falling out of favor. Sales fell roughly 1% for furniture and home furnishings stores and electronic and appliance retailers. Building and garden supply stores, as well as general merchandise retailers, are also showing signs of a sales slowdown.
Sales online fell 1%, as shoppers go back to physical stores. Meanwhile, sales at food stores rose 1.2% due to higher prices, not increased consumption. Business at restaurants was up 0.7%.