United States Retail

Retail sales gain steam in May

Latest reading: Nominal retail sales were up 0.9% in seasonally adjusted month-on-month terms in May, following 0.4% growth in the previous month and almost double market expectations. Relative to the previous month's data, readings in May improved for motor vehicle and parts dealers (+1.2% on a seasonally adjusted month-on-month basis vs -0.9% in April), general merchandise stores (+0.4% vs -0.1% in April), gasoline stations (+3.4% vs +2.4% in April) and non-store retailers (+1.5% vs +1.1% in April). In contrast, the reading for food and beverages softened in May (0.0% vs +0.7% in April). In annual terms, retail sales were up 6.9% in May, following a 4.8% increase in the prior month.

Panelist insight: TD Economics’ Ksenia Bushmeneva said: “This was a strong report, with both headline and core sales coming in above expectations. Unlike in April, the gain was not only driven by higher prices, with sales volumes also posting a solid increase in real terms. To be fair, higher gasoline prices remained a factor, but spending also received a meaningful lift from stronger vehicle sales and sizeable gains across several other categories. Even with real disposable income falling — in April, it was 1% lower than a year earlier — and pump prices still elevated, consumers appeared undeterred in May, perhaps dipping further into savings or leaning more heavily on credit cards.”

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