Jeenah Moon | Reuters
Retail sales declined 0.9%, even more than the 0.6% drop expected from the Dow Jones consensus, according to numbers adjusted for seasonality but not inflation. The decline followed a 0.1% loss in April and came at a time of unease over tariffs and geopolitical tensions.
Excluding autos, sales fell 0.3%, also worse than the estimate for a gain of 0.1%.
However, excluding a series of items such as auto dealers, building materials suppliers, gas stations and others, sales increased 0.4%. That reading, known as the control group, is what the department uses when calculating gross domestic product.
Building materials and garden stores saw sales fall 2.7%, while sliding energy prices pushed gasoline station receipts down 2%. Motor vehicles and parts retailers were off 3.5%, while bars and restaurants saw sales declined 0.9%.
On the plus side, miscellaneous retailers gained 2.9% while online sales rose 0.9% and furniture stores increased sales by 1.2%.
Stock market futures held negative after the release while Treasury yields also fell.
The pullback in retail sales came despite surveys showing that consumer sentiment actually increased in May, though compared to levels that had been falling through the year. The ongoing trade war ignited by President Donald Trump’s tariffs had dented consumer and business optimism, though an easing in some of the rhetoric amid a 90-day negotiating period has led to better readings.
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