Newsroom

Total retail sales fell by 0.3 percent in May, following an increase of 0.7 percent in April and an increase of 1.2 percent in March. NAFCU Chief Economist and Vice President of Research Curt Long analyzed the report in a new NAFCU Macro Data Flash report.

“A sizable reduction in automobile spending more than offset the increased amount drivers are paying at the pump,” stated Long. “Spending at appliance and home furnishings stores also declined in May, tracking with slowing home sales.”

Sectoral performance was mixed in May. Gasoline stations were the biggest winners with 4.0 percent growth in sales, followed by food and beverage stores (1.2 percent), food services and drinking places (0.7 percent), and sporting goods/hobby/musical instrument/book stores (0.4 percent). Motor vehicle and parts dealers were May's biggest losers (-3.5 percent), followed by electronics and appliance stores (-1.3 percent), miscellaneous store retailers (-1.1 percent), nonstore retailers (-1.0 percent), and furniture stores (- 0.9 percent).

Year-over-year growth in retail sales were up 8.5 percent during the month. Control group sales – which excludes auto, gas, and building material categories – were up 8.4 percent from a year ago.

“To be fair, some of the decline in retail sales growth reflects a pivot from goods to services spending, as retail sales primarily track the former,” added Long. “But the drop has been swift and is still understated by the numbers, given that retail sales figures are not adjusted for inflation.

“It is clear the economy is slowing even as the Fed rushes to tighten monetary policy in order to rein in inflation,” concluded Long. “The risk of a policy mistake is growing, along with the risk of recession.”

For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.