When it comes to predicting the future of the economy, monthly retail sales figures seem to have become no more reliable a method than reading tea leaves, and you don’t even get a cup of tea out of the process to salve your nerves.
The U.S. Commerce Department reported that advance estimates for May retail and the food services sales are expected to have increased just 0.3% from the previous month, and up 1.6% above the May 2022 numbers, when all the dust clears, for a total of $686.6 billion in sales.
Retail trade sales were up 0.3% from April 2023, and up 0.7% above last year. Non-store retailers (ecommerce) were up 6.5% from last year, while food services and drinking places were up 8.0% from May 2022.
In a separate report that was issued on June 15 the Commerce Department also reported that business inventories were at $2.5 trillion for April, which was up a slight 0.2% from March.
Drilling down into the retail sales data, the PYMNTS corporate data analytics firm found that consumer spending was notably pronounced year over year in the auto and auto parts sector, and at supermarkets and other kinds of grocery stores.
Consumers also appear increasingly willing to eat away from home, with food and drinking establishments’ sales rising 0.4% from April and 8% compared to last May. The numbers also showed people spending more on building materials and gardening supplies.
“The portrait that emerges, then, is of a consumer who’s fixing up the car, maybe even taking the plunge to buy a new one,” PYMNTS reported.
The National Retail Federation’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants – showed May was up 0.4% from April and increased 4.4% unadjusted year over year.
In April, sales were up 0.6% month over month and up 1.4% year over year. NRF’s numbers were up 3% unadjusted year over year on a three-month moving average as of May. Sales were up 4.2% year over year for 2023’s first five months.
“Consumers continued to spend on household priorities in May, supported by gains in the job market and wages,” said NRF President Matthew Shay.
“Retailers recognize the ongoing pressure on cost-sensitive consumers and are offering competitive pricing, a wide product mix and convenient shopping options to help stretch family budgets.”
NRF Chief Economist Jack Kleinhenz was equally optimistic. “This was a positive report with no sign of an abruptly slowing economy despite what has happened with inflation and interest rate pressures.”
Consumers are overcoming their negative reactions to inflationary pressures to shop, he believes.
“Even though shoppers dialed back in some categories on a year-over-year basis, these numbers confirm that consumers still have the capacity to spend. Job growth and wages are providing buoyancy, although inflation continues to take a bite out of consumer income.”
Kleinhenz pointed out that May is typically a strong month for retail as spring shopping hits its peak, also observing that “above-average temperatures and below-average precipitation no doubt played a favorable role.”
NRF said that May sales rose in six out of nine retail categories on a yearly basis, led by health and personal care stores (up 9.7%), online sales (8.7%), and grocery and beverage stores (3.7).
Clothing and clothing accessory stores were down 0.2% unadjusted year over year, as were electronics and appliance stores decreased 4.1%, and furniture and home furnishings stores, also were down 4.5%, unadjusted year over year.
