PLMA October Leaderboard

Retail sales in May turn downward

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WASHINGTON — Retail sales in May declined 0.3% as Americans spent less on motor vehicles and discretionary items, according to the Commerce Department. Lower gasoline prices contributed to last month’s decline. Stores selling consumer electronics and appliances posted their largest month-on-month declines in seven years.

Excluding automobiles, gasoline, building materials and food services, retail sales last month were unchanged from April. Compared with a year earlier, retail sales rose 3.8% in May.

“While the month-to-month comparisons may be unimpressive, current trends in retail sales growth are healthy,” Jack Kleinhenz, chief economist for the National Retail Federation (NRF) said in a statement. “It is important to note that retail sales over the past three months are 4% higher than they were during the same three-month period last year. The industry is off to a good start in the second quarter, and prospects remain in line with our annual forecast for spending.”

NRF’s economic forecast for 2017 projects that retail industry sales, which exclude automobiles, gasoline stations and restaurants, will grow between 3.7% and 4.2% over 2016. Online and other non-store sales, which are included in the overall number, are expected to increase between 8% and 12%. Factors cited by NRF included growth in jobs and incomes, as well as relatively low consumer debt.

Unemployment declined to 4.3% in May, its lowest level in 16 years, the Labor Department ­reported.

Federal Reserve policy makers on June 14 approved an increase in a key interest rate for the second time in 2017, despite expectations that inflation is running well below the central bank’s target of 2% a year. The Fed now expects inflation will fall well short of its target in 2017. Economists pointed out that weakness in inflation, if sustained, could put further monetary tightening in jeopardy. The Labor Department said its Consumer Price Index dipped 0.1% in May on falling prices for gasoline, apparel, airline fares, medical care and other items.


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