Financial News: U.S. Retail Sales Slump 0.9% In May, More

U.S. Retail Sales Slump 0.9% In May, More Than Expected

06/17/2025 - 10:21:00 (RTTNews)

(RTTNews) - The Commerce Department released a report on Tuesday showing U.S. retail sales decreased by more than expected in the month of May.

The report said retail sales slid by 0.9 percent in May after edging down by a revised 0.1 percent in April.

Economists had expected retail sales to decline by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.

The bigger than expected decline by retail sales partly reflected a steep drop in sales by motor vehicle and parts dealers, which plunged by 3.5 percent in May after falling by 0.6 percent in April.

However, excluding the slump in sales by motor vehicle and parts dealers, retail sales still fell by 0.3 percent in May after coming in unchanged in April. Ex-auto sales were expected to inch up by 0.1 percent.

The unexpected decrease by ex-auto sales came amid sharp declines in sales by gas stations and building materials and garden equipment and supplies dealers.

Sales by grocery stores and food services and drinking places also moved notably lower, while sales by miscellaneous store retailers spiked.

The report also showed significant increases in sales by furniture and home furnishing stores, non-store retailers and sporting goods, hobby, musical instrument and book stores.

Core retail sales, which exclude automobiles, gasoline, building materials and food services, rose by 0.4 percent in May after edging down by 0.1 percent in April.

"With the pre-tariff spending surge largely behind us and lower gasoline prices in the month, retail sales declined a sharper than expected 0.9% in May," said Nationwide Financial Markets Economist Oren Klachkin.

"The details of the report are more encouraging than the headline," he added. "The consumer hasn't pulled back but isn't spending lavishly and is understandably price sensitive."

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