Barron’s June 15th 2022 by Sabrina Escobar “US Retail Sales Fall for the First Time in 5 Months as Inflation Hits Big-Ticket Items” “Retail sales drop by 0.3% in May, dragged down by lagging sales in cars, motor parts, furniture, and other big-ticket items.”
Read Barron’s for all the details
Summary by 2244
Figure from aier.com
As inflation impacts budgets, consumers appear to be pulling back on buying big-ticket items. Retail sales from April have been revised from a gain of 0.9% to 0.7% and May’s number is -0.3% compared with an estimate of +0.2%. Excluding “motor vehicle and parts purchases, total spending in May was up 0.5% from April. Andrew Hunter (Capital Economics) adds that “China’s covid-19 lockdowns…rather than weakening demand” resulted in a 3.5% decline in car-related sales. The decline in retail sales would have been -0.7% had spending at the gas station didn’t increase by 4%-fueled by “surging gas prices.”
Besides vehicle related spending, “furniture and electronics [were] down by 0.9% and 1.3% respectively.” Experts suggest that consumers have shifted spending towards “services and other in-person activities as the summer months drew closer” but whether this is inflation-related or not is unclear. The CPI rose 1% in May and is at an annual rate of 8.6%-the highest in 40 years.”
Hunter suggests that the “second-quarter real consumption rate” will be 3% rather than the 4% he previously predicted.” At 3% the Federal Reserve has increased interest rates 0.75%,
Figure from aier.com
Comentarios