US May Retail Sales data shows a decline in consumer spending. Despite even the Core Retail Sales declining, April data was revised massively higher.
The US Retail Sales report is released monthly, reflecting the change in the total value of sales at the retail level. The consumer spending data presents a vital overview of the strength of any economy, as no economic growth is possible if the consumer does not spend.
Market participants expected a decline in the Retail Sales May data by 0.6% when compared to the previous month, but the outcome exceeded the expectations as the US Census Bureau revealed a decline of 1.3%.
Even the core data that does not consider the automobile sales declined. It dropped by 0.7% on expectations of an increase by 0.4%.
Details of the May 2021 US Retail Sales Report
While the headline data may have disappointed initially, a closer look at the May US Retail Sales report reveals a mixed picture. Indeed, the decline in May was bigger than expected, but retail sales in the United States are 28.1% above May 2020 levels.
Also, the large upward revisions in the April data reveals that the consumer is still willing to spend and remains a vibrant part of ongoing economic growth. Furthermore, both headline and core retail sales data is up over 18% when compared to the pre-pandemic level, a stunning development considering the impact of the COVID-19 pandemic on the global economy.
Clothing and clothing accessories increased by the most, up 2.8% in May 2021. When compared to one year ago, the segment is up over 200%. On the flip side, building materials, store retailers, motor vehicles and parts dealers all registered declining sales in May.
The US Census Bureau uses a stratified random sampling method to compile the data, which, in fact, is a survey. Rising retail sales reflect consumer optimism and represent an encouraging sign of further economic growth.
All in all, US retail consumers remain willing to spend, despite the decline in May. The US economic growth prospects remain intact.