May’s retail sales show consumer resilience

May’s retail sales show consumer resilience and confidence in the economy. Retail sales rose 0.5 percent in May seasonally adjusted from April and up 3.2 percent unadjusted year-over-year, according to the National Retail Federation (NRF). The numbers exclude automobile dealers, gasoline stations and restaurants.

“Today’s retail numbers, and upward revisions to prior months, reinforce the ongoing strength of the consumer and are consistent with a pick up in the pace of the economy in the coming months. The strong job market, recent income gains and elevated confidence translates into ongoing support for spending. Households, in the aggregate, are in solid financial condition but an escalation in trade tariffs will undoubtedly create a considerable downdraft to confidence and spending, or lead to a pullback in spending,” said Jack Kleinhenz, NRF chief economic.

Specifics from key retail sectors during May include:

• Online and other non-store sales were up 11.4 percent year-over-year.
• General merchandise stores were up 4.4 percent year-over-year.
• Clothing and clothing accessory stores were down 2.4 percent year-over-year.

Revisions to April monthly data were significant with retail sales reversing a loss of 0.2 percent monthly change to a gain of 0.3 percent. Retail sales data has been unusually choppy given the economic environment in recent months which include the partial government shutdown, volatile energy prices, roller coaster equity markets, notwithstanding escalating trade tensions. May’s retail sales increases were broad based, with nearly all categories showing gains, with the only decline coming from food and beverage stores. As of May, the three-month moving average was up 3.3 percent over the same period a year ago. NRF’s numbers are based on data from the U.S. Census Bureau, which said that overall May sales – including auto dealers, gas stations and restaurants – were up 0.5 percent seasonally adjusted from April and were up 3.2 percent year-over-year.