Consumer spending dropped sharply in May, with retail sales falling 0.9%, surpassing expectations for a smaller decline. The decrease was driven by lower gas and auto sales, alongside economic uncertainty and trade tensions. While some categories like online and furniture sales saw gains, overall spending remained sluggish, reflecting consumer caution despite improved sentiment surveys. The broader economic outlook remains mixed, with GDP expected to rebound after a weak first quarter.
Key Takeaways
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Retail sales fell 0.9% in May, led by declines in gas, auto, and building materials.
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Consumers are increasingly selective, seeking deals amid economic and trade uncertainties.
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GDP growth is projected to rebound despite recent spending pullbacks.
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