Retail and food services sales fell slightly in May as consumers shifted spending away from goods and toward experiences that were limited during the coronavirus pandemic, according to new federal data.
Monthly sales by retailers fell 1.3 percent in May, according to the advance estimate released Tuesday by the Census Bureau, but remained 28.1 percent above their level a year ago. The figures are adjusted for seasonal factors but not price changes.
Much of May’s decline in retail sales came from sectors and industries that had led the start of the recovery from the coronavirus recession. Sales by building materials and garden equipment stores fell 5.9 percent, sales by electronic and appliance stores fell 3.4 percent, and furniture and home goods suppliers saw a 2.1 percent decline in May. Sales by motor vehicle dealers and auto parts stores also fell 3.7 percent.
Spending on goods from those sectors remains far above May 2020 levels, but has fallen off as the reopening of the economy and supply constraints push consumer spending toward other sectors.
"The dip in May, as the economy continues to re-open, will come as a disappointment to many US market watchers that were expecting further growth," said Cailin Birch, global economist at The Economist Intelligence Unit, in an analysis.
"Nonetheless, it is important to remember that overall spending was only slightly below where it was in March — when it was temporarily boosted by stimulus checks — and well above spending in January-February," Birch said.
Sales by clothing and accessories stores rose 3 percent in May even as general merchandise stores and miscellaneous retailers saw declines of 3.3 percent and 5 percent. Restaurant and bar sales also rose 1.8 percent in May and are now 70.6 percent above their level a year ago.
“While there are downside risks related to labor shortages, supply chain bottlenecks, tax increases and over-regulation, overall, households are healthier, and consumers are demonstrating their ability and willingness to spend,” said Matthew Shay, CEO and president of the National Retail Federation. “We are confident.”