May Retail Sales Drop, but Underlying Numbers Are Promising
May retail sales figures seem to show U.S. consumers are losing their drive to shop, but some of the weakness in the numbers may be due to a quirk in the calendar, not in shoppers’ attitudes.
A late Memorial Day that shifted holiday sales to June drained some of the momentum from the May figures. Many retailers had estimated the shift — to a week later than last year — would lop up to 3 percentage points off their sales growth rate for the month. But drilling down into the numbers, there are signs that U.S. consumers are still willing to pony up for certain worthy items, though they’re holding the line on others.
The Commerce Department’s retail and food services sales tally for May rose to $362.5 billion, up 6.9% from May 2009 but down 1.2% from this April. Analysts had expected growth of 0.2% month-over-month. Excluding auto sales, totals were up 6.1% from May 2009 and retail sales were up 7.4% year-over-year, but were down 1.1% and 1.4% from April. The Commerce Department’s tally is the most complete picture of the retail industry: It includes gas, food and auto sales, as well as the results for Wal-Mart Stores (WMT), the world’s largest retailer, which doesn’t publicly report its monthly sales.
