US retail sales rise more than expected as shoppers spend more
Retail sales rose 0.9% in May, but the gain was uneven: online and furniture spending climbed while restaurants slipped and refund support began fading.
Shoppers kept spending in May, but the latest retail report suggested a consumer base that is still holding up rather than surging broadly. Retail sales rose 0.9% from April, a better-than-expected gain after a revised 0.4% increase the month before, helped by warmer weather and easing gasoline costs.
The details pointed to a narrow advance. Excluding sales at gas stations, retail sales rose 0.7% in May. Online sales climbed 1.5%, home furnishings and furniture stores rose 1% and clothing and accessories stores gained 0.3%. Electronics and appliance stores fell 0.5%, while restaurants, the lone services category in the report, slipped 0.1%. Core retail sales, which exclude autos, gasoline, building materials and food services, also increased 0.7%.
The report offered a mixed read on household finances. Some of May’s strength reflected higher gasoline receipts earlier in the month, though the national average gasoline price later slipped below $4 a gallon this week for the first time since April. At the same time, generous government tax refunds in April and May helped support spending, but economists said that cushion is fading. PNC Financial said households are spending down refunds faster than in prior years, especially among lower-refund households.
That matters because consumer spending accounts for more than two-thirds of the U.S. economy, making retail sales one of the clearest monthly gauges of demand. The data also arrived as inflation remained sticky: the Bureau of Labor Statistics said consumer prices rose 4.2% in May, the highest annual inflation rate since April 2023. Against that backdrop, the Federal Reserve was expected to leave its benchmark rate unchanged later on Wednesday, keeping pressure on households even as the latest sales numbers showed they were still finding ways to spend.
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