The latest US economic vibe check showed that people still aren’t feeling it.
US retail sales slumped 0.9% in May compared to April (but were up 3.3% YoY), according to the Commerce Department. This marks the “second straight monthly drop” in retail sales, Reuters noted. The outlet added that these numbers, combined with marginal job growth in April and declines in manufacturing activity, hinted that “domestic demand was softening.”
Vehicle and auto parts sales declined 3.5% from April. Sales decreased by 2.7% at building materials and garden equipment stores, and by 0.7% at food and beverage stores. Meanwhile, sales increased on a monthly basis at furniture stores (1.2%) and clothing stores (0.8%).
Consumers went on a spending spree in March ahead of expected new tariffs, but their buying “has downshifted markedly since then,” CNN reported.
“Any time you get a pullback in consumer spending, it tends to lead to a slowdown in overall GDP and broader economic activity, which feeds in to slower sales, hiring and in turn slower income growth,” Gregory Daco, chief economist at EY, told CNN.
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