Retail Sales Unexpectedly Fell in May

The big news today is the Federal Reserve meeting. The policy decision is due out at 2 p.m. Most of the world expects the Fed to increase rates by 0.75%. This would be the largest increase since 1994. The Fed will also update its economic forecasts.

However, we got a surprise this morning when today’s retail sales report came in negative. Sales dropped by 0.3% during May. Wall Street had been expecting a gain of 0.1%. Taking out cares, sales were up 0.5%. These numbers aren’t adjusted for inflation.

Sales were well below the pace in April, which posted a downwardly revised 0.7% increase from the initial 0.9% estimate.

Spending for the month declined even though sales at gas stations increased 4% due to fuel prices that scaled new heights, with regular unleaded hitting $4.43 a gallon in May and now running around $5. That growth was offset by a 3.5% decline at motor vehicle and parts dealers.

Miscellaneous store retailers saw a 1.1% drop in sales, while online stores posted a 1% decline. Bars and restaurants registered a 0.7% increase, part of a broader trend that has seen spending gradually shift from goods back to services.

Also today, I see that the yield on the 30-year mortgage rose to 6.28%. One week ago, it was at 5.5%.

Posted by on June 15th, 2022 at 10:49 am


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