Retail sales rose 0.3% in May despite pressure from higher inflation and interest rates
Jun 15, 2023, 5:40 AM
NEW YORK (AP) — Americans increased their spending at retailers last month despite pressure from still-high inflation and rising borrowing costs.
Thursday’s report from the Commerce Department showed that retail sales rose 0.3% from April to May, boosted by stronger sales of auto and parts dealers.
Economists had been expecting a decline in sales for the month. Last month’s increase pointed to a still-resilient economy, though retail sales have been bumpy this year after surging nearly 3% in January. Sales tumbled in February and March before recovering in April.
The retail sales report offers only a partial look at consumer spending; it doesn’t include many services, including healthcare, travel and hotel lodging.
The retail sales data follow a government report this week that consumer inflation eased last month. Prices rose just 0.1% from April to May and just 4% over the previous 12 months — the lowest such figure in over two years. Americans are still facing surging prices for many items, including rent and used cars, though some of them are expected to slow or even decline in the coming months.
At the same time, closely watched “core” prices, which exclude volatile food and energy costs and are considered better able to capture underlying inflation trends, increased 5.3% in May compared with 12 months earlier. That’s still far above the Fed’s target of 2%.