U.S. retail sales had a better month in May than experts expected. But those same experts are saying it may not last long.
According to a report from Reuters, a slowdown is likely “as the cushion from larger tax refunds against higher prices diminishes.”
The Commerce Department’s Census Bureau released Wednesday, retail sales jumped 0.9% last month after a downwardly revised 0.4% uptick in April. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, rising 0.5% after a previously reported 0.5% increase in April.
Some of the rise in sales last month reflected higher gasoline prices, which lifted receipts at service stations, the report said.
Gasoline prices surged to four-year highs amid the U.S.-Israeli war with Iran. They have since retreated, with the national retail average slipping below $4 a gallon this week for the first time since April.
The retail sales data had no impact on monetary policy. The Federal Reserve voted on Wednesday to keep the U.S. central bank’s benchmark overnight interest rate in the 3.50% to 3.75% range.
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.7% in May after an unrevised 0.5% advance in April.
Consumer spending, which accounts for more than two-thirds of the economy, increased at a 1.4% annualized rate in the first quarter. The economy grew at a 1.6% pace last quarter. The Atlanta Fed’s GDP tracker shows the economy growing at a 2.8% pace this quarter.
