May retail sales fall as gas purchases tumble
WASHINGTON (MarketWatch) -- U.S. retail sales fell in May for the second month in a row -- the first time that's happened in two years -- as consumers spent less to fill up their gas tanks, government data showed Wednesday.
Retail sales declined by 0.2% last month on a seasonally adjusted basis, the Commerce Department said.
Sales were also revised lower for April and March, with April's revision now showing a decline instead of an increase. Lower sales over the past two months marked the first back-to-back drop since May and June 2010.
If gas purchases are omitted, however, retail spending actually rose a slight 0.1% last month, the government said. Sales at gas stations slumped 2.2% in May, the biggest retreat since December.
Separately, the Labor Department reported that falling gasoline prices contributed to a big 1% drop in wholesale costs for May. Read story on wholesale prices.
The retail report was a mixed bag, economists said. Sales have clearly softened in the spring, reflecting the overall slowdown in the U.S. economy, but some segments are doing much better than others.
"U.S. retailers didn't have much to cheer about in May, although the results were choppy across sectors," said economist Avery Shenfeld of CIBC World Markets.
Strong demand at auto dealers and Internet retailers boosted overall spending.
Auto sales rose 0.8% based on the government's seasonally adjusted data. The increase was somewhat of a surprise since industry figures showed that total vehicle sales fell in May from April -- to a 13.7 million annual rate from 14.4 million.
Excluding autos, retail sales fell 0.4%.
Economists surveyed by MarketWatch had expected sales to decline 0.3% in May, or by a smaller 0.1% excluding autos.
Aside from gas stations, sales also fell 1.7% at building materials and home-improvement stores and 0.5% at general-merchandise stores.
In a potentially worrisome sign, sales fell at virtually all the establishments that tend to rely on discretionary income -- extra money consumers have left over after paying bills and for necessities.
Sales declined by 0.2% at bars and restaurants, by 0.1% at health-care stores and by 0.1% at outlets that sell sporting goods and hobby items.
Sales also dropped 0.2% on the month at liquor and grocery stores.
Sales also rose 0.9% at apparel stores as consumers bought new clothes for the summer. And sales increased 0.8% at electronics and appliance stores.
For April, the Commerce Department revised retail spending to show a 0.2% decline instead of a 0.1% increase. Sales also rose at a slower 0.4% pace in March compared to a prior reading of 0.7%.
Over the past 12 months, retail sales have risen at a 5.3% pace, down from 5.6% in April.