U.S. retail sales climbed 0.9% in May for the fourth straight month, a sign consumers kept spending even as inflation bites and sentiment stays near historic lows.
For the fourth month in a row, Americans kept spending—despite the nagging arithmetic of higher prices and worsening confidence.
Retail sales rose 0.9% in May from the prior month, the Commerce Department said Wednesday. The gain came after three straight monthly increases and beat expectations of a 0.5% rise. as economists’ forecasts from a poll by data firm FactSet had predicted. The figures are adjusted for seasonal swings but are not adjusted for inflation.
Money moved across nearly every corner of retail. Spending rose the most at gasoline stations, up 3.4%, a jump that mostly reflects higher gas prices last month. When gasoline purchases are left out, retail sales still rose a solid 0.7% in May. Online sales increased 1.5% last month. By contrast, electronics retailers saw sales fall 0.5%, and department stores posted a decline of 0.3%.
Wednesday’s report lands as the U.S. economy’s current quarter runs from April through June. Consumer spending—about two-thirds of the US economy—has so far shown no clear sign of a pullback.
That’s happening even as inflation takes a bite out of paychecks. When wages are adjusted for price increases, wages have been declining. Consumer sentiment has also fallen to historic lows, driven in part by higher gas prices. Still. sentiment hasn’t been a reliable predictor of future spending in recent years. leaving the only real question: how long consumers can keep absorbing higher costs before the numbers stop looking steady.
At the moment, though, the trend is straightforward. Four straight months of growth in retail sales, broad-based increases across categories, and a stronger-than-expected May report add up to a better-looking picture for economic growth in the quarter now in progress.
retail sales May Commerce Department inflation consumer sentiment FactSet gasoline prices online sales electronics department stores US economy