U.S. Retail Slump Extends Into May
High interest rates and inflation have continued to affect U.S. consumers in May, causing retail sales to increase less than expected. For the month, advance estimates showed a 0.1 percent gain in retail sales, which is lower than the 0.3 percent economists had predicted, but higher than April's revised drop of 0.2 percent.
Key Areas of Decline
The biggest contributor to the sluggish retail sales was a 2.2 percent drop at gas stations. Other areas that saw lower sales include:
- Furniture Stores
- Building Materials
- Garden Equipment
Positive Highlights
Despite the overall slowdown, there were some areas where spending increased. Americans spent more on:
- Specialty Sporting Goods
- Books
- Musical Instruments
This trend might indicate that parents are trying to keep their children entertained as the summer vacation approaches.
Federal Reserve's Stance
With inflation still high, the Federal Reserve has been hesitant to lower interest rates, which are currently at their highest level in 25 years. However, slower retail spending and a generally slowing economy might push the central bank to reconsider its policy.
By focusing on these key points, we can better understand the current state of the U.S. economy and the factors influencing consumer behavior.
