Core Retail Sales Decline 0.1% in May, Indicating Consumer Spending Slowdown
Core Retail Sales, which exclude automotive and gasoline sales, fell by 0.1% in May, missing the 0.2% forecast. This segment saw the previous month’s data revised down to -0.1%, indicating a decline in consumer discretionary spending.
Trade Sales Insights
Retail trade sales showed a 0.2% increase from April 2024 and a 2.0% rise from the same period last year. Despite the modest monthly gain, the year-over-year growth suggests a steady but cautious consumer sentiment in the retail sector.
Nonstore retailers, encompassing online and mail-order businesses, experienced a robust 6.8% increase from May 2023, reflecting the ongoing strength in e-commerce. Meanwhile, food services and drinking places posted a 3.8% year-over-year growth, indicating a recovery in the hospitality sector.
Market Forecast
Given the weaker-than-expected retail sales data and downward revisions for previous months, the short-term outlook for the retail sector appears bearish. Traders should anticipate continued volatility as consumer spending shows signs of slowing, influenced by economic uncertainties and potential interest rate adjustments. This cautious sentiment may pressure retail stocks and related sectors in the near term.
