Please ensure Javascript is enabled for purposes of website accessibility

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

8 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

9 hours ago

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

10 hours ago

California’s Newsom Sues Fox News for $787 Million for Defamation Over Trump Call

10 hours ago

Motorcycle Collides With Tractor in Fatal Fresno County Collision

11 hours ago

Fourth of July Celebrations Begin Saturday. Here’s Your Fresno Area Guide

13 hours ago

Bill Moyers, Broadcaster and LBJ’s White House Press Secretary, Dies at 91

1 day ago

State Department Approves $30 Million for Gaza Humanitarian Foundation

1 day ago

Cargo Ship That Caught Fire Carrying Electric Vehicles Sinks in the Pacific

1 day ago

4 Million Acres of California Forests Could Lose Protection. What Trump’s ‘Roadless Rule’ Repeal Could Do

2 days ago
Retail Sales Rise a Meager 0.1% in May from April as Still High Inflation Curbs Spending
gvw_ap_news
By Associated Press
Published 1 year ago on
June 18, 2024

Exploring the impact of inflation on consumer spending and retail sales. (AP File)

Share

Getting your Trinity Audio player ready...

NEW YORK — Consumers barely increased spending in May from April as still high prices on groceries and other necessities and high interest rates curbed spending.

Retail sales rose 0.1% in May, below the pace that economists projected, according to the Commerce Department. And April sales were revised downward — a 0.2% decline, from unchanged. Sales rose 0.6% in March and 0.9% in February. That comes after sales fell 1.1% in January, dragged down in part by inclement weather.

Excluding gas prices and auto sales, retail sales rose the same amount.

Impact of Falling Gas Prices on Retail Sales

Retail sales in May, in part, were depressed by falling gas prices. Excluding sales from gasoline, sales were up 0.3%. The national average price for a gallon of unleaded gasoline was $3.45 as of Monday; a month ago, it was $3.59, AAA said.

Government retail data isn’t adjusted for inflation, which was unchanged from April to May, according to the latest government report. High inflation helps to inflate retail sales figures.

Still, economists said the report reflected an increasingly cautious consumer. But they point to a silver lining: a weaker-than-expected retail sales report increases the likelihood that the Federal Reserve will start to cut interest rates in a few months.

“Consumer spending is cooling in a fairly orderly fashion,” said Jeffrey Roach, chief economist for LPL Financial in Charlotte, North Carolina. But he added, “So far, the economy could pull off a soft landing, especially if the Fed is quick to adjust policy as conditions change.”

Performance of Various Retail Categories

The report showed mixed performances for various categories. While auto and vehicle dealer sales rose, areas related to home sales fell.

Sales at clothing and accessory stores rose 0.9%, while electronics and appliance stores posted a 0.4% gain. Online sales rose 0.8%. But business at building material and garden supplies fell 0.8%. Sales at gas stations were down 2.2%.

The retail sales data also offers only a partial look at consumer spending because it excludes things like travel and lodging. However at restaurants, the lone service category tracked in the monthly retail sales report, sales fell 0.4% in May.

A strong job market and rising wages have fueled household spending but spending remains choppy in the face of rising credit costs and still high inflation, though it has eased. To give shoppers some relief, Target, Walmart and other chains have rolled out price cuts — some permanent, others temporary, heading into the summer months.

Impact of Inflation and Interest Rates on Consumer Sentiment

Earlier this month, the government reported that America’s employers added a robust 272,000 jobs in May, accelerating from April and an indicator that companies are still bullish enough in the economy to keep hiring despite stubbornly high interest rates.

The government’s report on consumer inflation last week, showed how inflation cooled substantially in May, as the cost of gasoline, new cars, and even car insurance fell.

Consumer prices excluding volatile food and energy costs — the closely watched “core” index — rose 0.2% from April to May, the government said last week. That was down from 0.3% the previous month and was the smallest increase since October. Measured from a year earlier, prices increased 3.3%, less than the 3.6% gain a month earlier.

Federal Reserve officials said last week after the report came out that inflation has fallen further toward their target level in recent months but signaled that they expect to cut their benchmark interest rate just once this year.

Still, anxiety over still stubborn inflation helped drive down U.S. consumer sentiment for the third consecutive month. The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, dropped to 65.6 this month from a final reading of 69.1 in May.

Retail executives say shoppers are still buying, but they’re being choosy about what they spend their money on.

Darren Rebelez, president and CEO of Ankeny, Iowa-based Casey’s Casey’s General Stores, Inc. which operates more than 2,600 convenience stores in 17 Midwestern states, noted shoppers remain resilient, but the company is also in a sweet spot. Roughly 25% of the chain’s customers have household income of less than $50,000, and seven of the bottom 10 most affordable states are in the stores’ footprint so customers can stretch their dollars further.

Still, Rebelez says customers are making choices like shifting away from candy because of skyrocketing cocoa prices and moving into baked goods like cookies, brownies and donuts. They’re also buying less bottled soda in favor of cheaper soda fountain beverages.

“They’re not giving up on their indulgences,” he said. “They’re just choosing to spend it differently so they can get a little more value for the money.”

Companies are also ramping up experiences as customers shift more of their money to services over buying stuff.

This spring, Lowe’s Inc, the nation’s second-largest home improvement retailer behind Home Depot, signed a multiyear agreement with Argentine professional soccer player Lionel Messi, Inter Miami CF and the upcoming soccer tournament Conmebol Copa América USA to play a role in its marketing and advertising campaigns.

Lowe’s is hoping to win over soccer fans with signage and in-stadium activations and community programming at a time when many shoppers are jumping around to different home improvement retailers for their projects and show no signs of loyalty. For example, select Lowe’s stores will host Conmebol Copa América watch parties.

“It’s a significant opportunity for us to grow,” said Jennifer Wilson, Lowe’s chief marketing officer said. “And so this is also an effort for us to make that relationship stickier.”

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

DON'T MISS

Tensions Flare at Announcement of Major Fresno County Gang Takedown

DON'T MISS

Measure C ‘Blackmailed’ As Fresno Enviro Coalition Gets Huge Say on Transportation Tax

DON'T MISS

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

DON'T MISS

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

DON'T MISS

US Supreme Court Preserves Key Element of Obamacare

DON'T MISS

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

DON'T MISS

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

DON'T MISS

Alleged ‘Fake’ ICE Agents Charged. Fresno Court Date Set

DON'T MISS

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

UP NEXT

Tensions Flare at Announcement of Major Fresno County Gang Takedown

UP NEXT

Measure C ‘Blackmailed’ As Fresno Enviro Coalition Gets Huge Say on Transportation Tax

UP NEXT

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

UP NEXT

US Supreme Court Preserves Key Element of Obamacare

UP NEXT

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

UP NEXT

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

UP NEXT

Alleged ‘Fake’ ICE Agents Charged. Fresno Court Date Set

UP NEXT

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

UP NEXT

California’s Newsom Sues Fox News for $787 Million for Defamation Over Trump Call

UP NEXT

Motorcycle Collides With Tractor in Fatal Fresno County Collision

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

6 hours ago

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

8 hours ago

US Supreme Court Preserves Key Element of Obamacare

9 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

9 hours ago

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

10 hours ago

Alleged ‘Fake’ ICE Agents Charged. Fresno Court Date Set

10 hours ago

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

10 hours ago

California’s Newsom Sues Fox News for $787 Million for Defamation Over Trump Call

10 hours ago

Motorcycle Collides With Tractor in Fatal Fresno County Collision

11 hours ago

Ringo Is Ready to Rock Your World With ‘Pawsitive’ Vibes!

11 hours ago

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

WASHINGTON — The U.S. Department of Government Efficiency has sent staff to the agency that enforces federal gun laws with the goal of revis...

4 hours ago

American Flag Revolver
4 hours ago

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

Rob_Bonta_Speaking_At_Press_Conference_1280x720
5 hours ago

Tensions Flare at Announcement of Major Fresno County Gang Takedown

Garry_Bredefeld_Sandra_Celedon_Mesure_C_1280x720
5 hours ago

Measure C ‘Blackmailed’ As Fresno Enviro Coalition Gets Huge Say on Transportation Tax

Fresno_Unified_Raises_1280x720
6 hours ago

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

Eastern Market in Washington, D.C.
8 hours ago

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

Obamacare Sign in San Ysidro, California
9 hours ago

US Supreme Court Preserves Key Element of Obamacare

Pride Flags Fly in New York
9 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

10 hours ago

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

Help continue the work that gets you the news that matters most.

Search

Send this to a friend