EmailAfter increasing 0.3% in April, retail sales declined 0.2% in May. This was the first monthly decline in retail sales since June 2010. While disappointing, the Briefing.com consensus expected retail sales to fall an even worse 0.7%.
As expected from the motor vehicle sales report, motor vehicle and parts dealers saw the brunt of the spending pullback. Sales at these stores fell 2.9%.
Outside of the motor vehicle sector, retail sales were in the black. Sales increased 0.3%, down from 0.5% in April, but slightly better than the 0.2% increase expected by the consensus.
Core retail sales growth -- which excludes the highly volatile motor vehicle dealers, gasoline stations, and building material and supply stores -- increased 0.2%. This is the smallest increase since core sales declined in December 2010.
Discretionary spending was soft. Furniture, electronics and appliances, sporting goods, and general merchandise retailers all declined during the month.
Surprisingly, food and beverage stores also saw sales decline. While the CPI report will not be released until tomorrow, the collapse in the food component of the PPI suggests the sales decline in this category may be due to weakening food prices.
