Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose 0.3% in May, the Commerce Department said Thursday. Excluding the more volatile measurements of gasoline and autos, sales climbed 0.4% last month. The figures are not adjusted for inflation.
Consumers spent more on big-ticket items like cars, furniture and home improvement projects. Gas sales slid 2.6% in May. Sales declined in just two of 13 retail categories last month.
A solid job market and big wage increases have helped to buoy consumer spending. That strong spending, however, could keep inflation elevated, adding pressure on the Fed in its quest to cool the economy and consumer prices.
“The upside for retail spending does have a downside, however, in the form of continued inflationary pressure,” said Ben Ayers, Nationwide senior economist. “Higher interest rates haven’t tamped down consumer demand enough to meaningfully slow price growth, especially on the services side of the economy. These hot trends for consumers could lead to another interest rate hike by the Fed in July.”