U.S. retail sales for May showed a month-on-month decline of 0.9%, worse than the expected 0.7% drop. Core retail sales (excluding autos) fell 0.3%, against expectations of a 0.1% increase. This marked the largest monthly decline in four months and the first back-to-back drop since October/November 2023, driven by a 3.5% fall in auto sales and weaker gasoline station sales. Despite the monthly decline, retail sales were up 3.0% year-over-year, with nonstore retailers rising 8.3% and food services up 5.3%. This highlights a consumer spending pullback, signalling a weakening U.S. economy and potentially reinforcing expectations of slower growth amid the Fed’s cautious monetary policy stance.
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U.S. retail sales for May showed a month-on-month decline of 0.9%, worse than the expected 0.7% drop. Core retail sales (excluding autos) fell 0.3%, against expectations of a 0.1% increase. This marked the largest monthly decline in four months and the first back-to-back drop since October/November 2023, driven by a 3.5% fall in auto sales and weaker gasoline station sales. Despite the monthly decline, retail sales were up 3.0% year-over-year, with nonstore retailers rising 8.3% and food services up 5.3%. This highlights a consumer spending pullback, signalling a weakening U.S. economy and potentially reinforcing expectations of slower growth amid the Fed’s cautious monetary policy stance.