U.S. Retail Sales Inch Up 0.1% In May, Slightly Less Than Expected

Retail sales in the U.S. inched slightly higher in the month of May, according to a report released by the Commerce Department on Tuesday.

The Commerce Department said retail sales crept up by 0.1 percent in May after dipping by a revised 0.2 percent in April.

Economists had expected retail sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

“Consumer spending is slowing because real incomes growth is moderating and because some consumers are becoming credit constrained amid elevated interest rates and rising credit card utilization,” said Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics.

He added, “However, with unemployment unlikely to rise much and the state of households’ balance sheets still looking strong in aggregate, we expect consumer spending growth will remain close to its current pace in the second half of the year.”

The uptick by retail sales partly reflected a rebound by sales by motor vehicle and parts dealers, which climbed by 0.8 percent in May after falling by 0.4 percent in April.

Excluding the increase in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in May after slipping by a revised 0.1 percent in April.

Economists had expected ex-auto sales to climb by 0.2 percent, matching the increase originally reported for the previous month.

The report showed a notable pullback in sales by gas stations, which tumbled by 2.2 percent in May after surging by 1.9 percent in April.

Sales by furniture and home furnishings stores and building materials and supplies dealers also showed notable decreases, while sales by sporting goods, hobby, musical instrument and book stores spiked.

Meanwhile, the report said core retail sales, which exclude automobiles, gasoline, building materials and food services, increased by 0.4 percent in May after falling by 0.5 percent in April.