On May, US retail sales rose by 0.1% month-on-month, falling short of expectations, with the previous value further revised downwards

US retail sales in May showed almost no growth, with previous months also being revised downward, indicating increasing pressure on consumer spending.

On Tuesday, June 18, the US Department of Commerce released the retail sales data for May. The data showed that US retail sales in May increased by 0.1% month-on-month, lower than the market expectation of 0.3%, with the previous value revised from 0% to -0.2%.

Retail sales fell short of expectations across the board, with specific details as follows:

Retail sales increased by 0.1% month-on-month, below the expected 0.3%, with the previous value at -0.2%;

Excluding automobiles, retail sales decreased by -0.1% month-on-month, compared to the expected 0.2% and the previous value of 0.2%;

Excluding automobiles and natural gas, retail sales increased by 0.1% month-on-month, lower than the expected 0.4%, with the previous value at -0.3%;

Core retail sales (excluding automobiles, gasoline, building materials, and food services) grew by 0.4% month-on-month, surpassing the expected 0.3%, but with the previous value at -0.5%, marking the largest decline in a year;

After adjusting for inflation (roughly), "real" retail sales (non-seasonally adjusted) showed a decline.

Following the data release, the US dollar index fell more than 10 points in the short term, now trading at 105.40; US stock futures saw a slight increase, with Nasdaq 100 index futures expanding to 0.3%. The yield on the US 10-year Treasury bond fell in the short term, now at 4.252%.

Largest Declines in Gasoline and Food Services Spending

Among the 13 categories tracked by the US Department of Commerce, five categories experienced declines, with gasoline and food services spending being the largest downward drivers. Gasoline prices were relatively cheaper that month, and spending on services such as restaurants and bars decreased by 0.4%, marking the largest decline since January.

These data highlight a significant slowdown in consumer spending after a strong start to the year, with economists predicting that due to persistent inflation, a cooling job market, and signs of financial pressure, Americans will become more cautious, leading to moderate growth in future consumption.

Consumer borrowing data released earlier this month showed that due to rising household debt costs, credit card balances saw their first decline in three years, while delinquency rates continued to rise.

Powell "slapped in the face" again? Rate cut looming?

Data released last week showed that the US May CPI and PPI indices were lower than expected, strengthening the market's expectation of the Fed's ability to cut interest rates soon. Fed Chairman Powell, when maintaining interest rates unchanged last week, stated that consumer spending is still steadily increasing and that the household sector is "in pretty good shape."

This report may further enhance expectations that a weak US economy could prompt the Fed to start cutting interest rates