May 2025 Retail Sales: Forecast & Analysis
- U.S.consumer spending, a key driver of the economy, showed signs of faltering in May, according to a Commerce Department report released Tuesday.
- The report indicated a 0.9% decrease in retail sales for May, a steeper fall then the 0.6% decline projected by economists surveyed by Dow Jones.
- Several sectors experienced notable downturns.Building materials and garden equipment saw a 2.7% drop, while receipts at gasoline stations fell 2% due to lower energy prices.
May 2025 saw a surprising dip in retail sales,with a 0.9% decrease, exceeding forecasts, signaling potential economic shifts. The report reveals declines in auto sales and building materials,while online shopping and furniture stores experienced gains.This deep dive examines the key drivers like consumer unease and tariff concerns, providing crucial insights into the current economic climate. News Directory 3 offers expert analysis, dissecting the downturn and its implications on consumer behavior and overall growth. We explore how the figures impact various sectors. Track the factors shaping the economy. Discover what’s next …
Retail sales Weaken in May Amid Economic Unease
updated June 17, 2025
U.S.consumer spending, a key driver of the economy, showed signs of faltering in May, according to a Commerce Department report released Tuesday. Retail sales experienced a significant drop, fueling concerns about the economic outlook. The decline, which exceeded economists’ expectations, highlights the impact of factors such as fluctuating gas prices and ongoing trade tensions on consumer behavior. This slowdown in retail activity could have implications for overall economic growth, making it a closely watched indicator.
The report indicated a 0.9% decrease in retail sales for May, a steeper fall then the 0.6% decline projected by economists surveyed by Dow Jones. This figure is adjusted for seasonal variations but not for inflation. April’s figures were also revised downward, showing a 0.1% decrease. Excluding auto sales, the decline was 0.3%, also worse than anticipated. However, a control group excluding auto dealers, building materials, gas stations, and others, showed a 0.4% increase, which is used in calculating gross domestic product.
Several sectors experienced notable downturns.Building materials and garden equipment saw a 2.7% drop, while receipts at gasoline stations fell 2% due to lower energy prices. Motor vehicle and parts retailers experienced a 3.5% decrease, and sales at bars and restaurants declined by 0.9%. Conversely, miscellaneous retailers saw a 2.9% increase, online sales rose 0.9%, and furniture stores gained 1.2%.
Heather Long,chief economist at Navy Federal Credit Union,noted that consumers are becoming more selective in their spending.”Americans bought cars in March ahead of tariffs and stayed away from car dealerships in May,” Long said. “Families are wary of higher prices and are being a lot more selective with where they spend their money. People are hunting for deals and aren’t eager to buy unless they see a good one.”
The retail sales pullback occurred despite surveys indicating improved consumer sentiment in May, even though those levels remained below earlier points in the year. The ongoing trade war,initiated by tariffs,has dampened both consumer and business optimism,even though a temporary easing of rhetoric has led to slightly improved sentiment readings.
The first quarter saw a GDP decline of 0.2% at an annualized rate, but projections point to a rebound. Before the retail sales data, the Atlanta Federal Reserve’s GDPNow tracker estimated second-quarter growth at 3.8%. This estimate will be updated later Tuesday.
What’s next
The Commerce Department’s report adds another layer to the ongoing economic narrative. Economists will be closely watching upcoming data releases to determine whether this slowdown in retail sales is a temporary blip or a sign of a more significant economic shift. The Federal Reserve will also be monitoring these trends as it considers future monetary policy decisions.