Retail Sales Fell for First Time in 10 Months
WASHINGTON (AP) — Americans bought fewer cars in May, pulling retail sales down for the first time in nearly a year.
Sales among U.S. retailers fell 0.2 percent last month, the Commerce Department said. It was the first decline after 10 straight increases.
Auto sales dropped 2.9 percent, the largest decline since February 2010. But excluding the weak car sales, retail sales rose 0.3 percent.
The slump in retail sales was the latest report signaling that the economy has lost momentum. Consumers are struggling to deal with high gasoline prices and a slowdown in hiring. While the surge in gas prices eased in May, pump prices are still significantly higher than a year ago.
A lack of deals and the shortage of some fuel-efficient models in high demand were to blame for the decline in auto sales. The natural disasters in Japan disrupted shipments of cars and component parts to the United States.
For May, sales at gasoline stations rose 0.3 percent, much slower than the 1.4 percent jump in March.
Higher gas prices have pushed retail sales higher in recent months. But they have also left consumers with less to spend on discretionary goods. Analysts hope that the economy will regain momentum in the second half of this year if gasoline prices moderate and consumers spend more on other items.
Sales at department stores and big general merchandise stores such as Wal-Mart and Target edged down 0.1 percent in May. Many of the nation's big retail chains reported shoppers pulled back on such as clothing and home goods.
Sales were also down at furniture stores and electronics and appliance stores, declines that probably reflected the continued weakness in the housing market.
Economists surveyed by The Associated Press now believe the economy will show only a modest growth pickup in the current April-June quarter. They forecast growth at an annual rate of 2.3 percent, which would be only a slight improvement from the lackluster 1.8 percent growth in the January-March quarter.