Ooops! The allegedly “strong” US consumer took a belly-flop in May. And that -0.3% month-on-month decline amounts to -1.3% when adjusted for May’s red hot CPI reading. Annualized, that’s a 15% shrinkage in real retail spending.
As always, there was a lot of noise in the headline number. Auto sales dropped 3.5% in May, reinforcing data from Ward’s Automotive Group that showed sales dropped the most since last August during the month. In the meanwhile, spending at gas stations rose 4%, reflecting the surge of fuel prices.
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