Americans broadly reduced spending at retailers in May, dealing the latest setback to an economy struggling to shift into faster growth.
Retail sales--measuring consumer spending at stores, restaurants and online--fell 0.3% from a month earlier, the Commerce Department said Wednesday. That was the steepest drop since January 2016.
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Economists surveyed by The Wall Street Journal had expected no change in the sales level.
The decline was driven by fewer car purchases and less spending at service stations after a drop in gasoline prices. Excluding cars, sales fell 0.3%. Excluding cars and gasoline stations, sales were flat.
The figures suggest Americans remain cautious despite steady job growth, low unemployment, modest wage gains and a booming stock market. The report also signals economic output is struggling to rebound after a sluggish winter. Retail sales are a big component of consumer spending, which is in turn the biggest source of economic demand in the U.S.
Monthly retail sales figures are volatile, and over a broader period retail sales are slowly rising. Sales climbed 3.9% in the first five months of this year compared to the same period in 2016.
But many retailers are seeing a slowdown of late. Car sales slipped last month from April and fell nearly 2% in March through May compared to the prior three months.
Spending fell sharply at department stores and electronic stores in May from April. Sales slipped at general merchandise stores.
Conversely, sales continued to rise at online retailers, and climbed steadily at furniture and clothing outlets.
The Commerce Department's retail sales report can be found at http://www.census.gov/retail/marts/www/marts_current.pdf.
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(END) Dow Jones Newswires
June 14, 2017 08:45 ET (12:45 GMT)