US retail sales dip in May, core categories resilient: Census Bureau

Excluding food services, retail alone mirrored the monthly dip but retained year-on-year growth. Core retail sales—which exclude vehicles, fuel, and restaurants—slipped just 0.1 per cent month-on-month (MoM) but surged 4.6 per cent YoY, underscoring firm consumer spending despite economic headwinds.

Non-store retail, led by e-commerce, was a standout performer, rising 0.9 per cent from April and 8.3 per cent from May 2024. Clothing and accessories stores saw a 0.8 per cent monthly gain, while furniture and home furnishings posted strong annual growth of 8.8 per cent.

April’s combined business sales (distributive trade and manufacturers’ shipments) were valued at $1,922.8 billion, down 0.1 per cent from March but up 3.8 per cent YoY. Inventories stood at $2,656.5 billion, nearly flat MoM but up 2.2 per cent from April 2024, resulting in an improved inventories-to-sales ratio of 1.38, down from 1.4 a year ago.

May core retail sales were up 0.1 per cent MoM and 3.9 per cent unadjusted YoY. A 3-month moving average showed a 4.4 per cent annual increase, affirming steady retail momentum, according to the National Retail Federation (NRF) based on the census data.

Despite the dip in overall sales, analysts point to consistent consumer activity in discretionary and digital segments as a sign of underlying strength, even as the sector contends with inflationary pressures and trade-related uncertainties.

“We are continuing to see growth for core retail sales this year at about the same pace as last year. Despite a soft labour market, aggregate consumer spending has been supported by wage gains and an improvement in the stock market. Consumers are seeing their way through the uncertainty with trade policies, but I expect the inflation associated with tariffs to be felt later this year. Consumers remain very price sensitive, and those costs are likely to weigh heavily on consumer budgets,” said Jack Kleinhenz, chief economist at National Retail Federation (NRF).

ALCHEMPro News Desk (SG)