In May, retail sales fell .2% from April, to $404.6 billion. However, this decline was partly due to lower prices in May, since the Commerce Department's retail report does not adjust for inflation. Falling gas prices resulted in a 2.2% decline in gas station sales. Retail sales were still 5.3% higher year-over-year, meaning that demand has risen in the past year. Since prices were only up 1.7% last month, this means the increase was not solely driven by price increases.
There were some other retail trends that are important to note.
- Online sales were up 1.3% in the last month, a whopping 12.4% higher than last year. This is another example of shoppers' shift to thrift. It is easier and usually less expensive to buy most consumer goods online. This provides real value, and that's what the shift to thrift is all about.
- Auto dealers saw a 1% increase in May, an 11% increase over last year.
- Electronics and appliance stores saw a .8% monthly rise. However, this was .1% dip from last year, reflecting heavy competition from online retailers.
- Furniture stores were up .4% in May, an 8.7%. increase over last year.
- Department stores, which were down in April, saw a .2% gain, but this was still .9% lower than last year.
- Surprisingly, clothing stores followed a different trend: up .9% for the month, which was 5.4% better than last year.
With all this growth, what other segments (other than gas stations) brought the average down? Building and garden supply stores sales took another hit, falling 1.7% after dropping 1.8% in April. However, this is still a 5.3% increase over last year. Sporting goods/hobby stores and health/beauty stores each saw their sales fall .1% in May. Restaurants were down .2%, although this was a 7.4% increase over last year. (Source: U.S. Commerce Dept, "U.S. Retail Sales," June 13, 2012)
What It Means to You
It's difficult to tease apart the impact that changing oil and gas prices have on the retail report. However, it looks like consumer spending is holding fairly steady. This should help the second quarter's GDP growth report, which does account for price changes. That's because consumer spending drives 70% of GDP.
However, don't expect this to help unemployment. The growth in online shopping is another example of how technology, such as online shopping, is replacing jobs, this time in retail.