May 2019 saw an escalation in spending by US shoppers. This had provided “critical fuel for the U.S. economy’s continued expansion despite trade tensions and slowing global growth.” According to the US Commerce Department, the increase in retail stores was 0.5 percent from April to May. There was an increase in April too which was slightly higher than the department’s estimate. All of these figures show that household spending is high and on the up.
Other good news is that almost all categories (in particular auto sales at 0.7 percent) showed improvement and real gains. There were some declines (within the food and beverage industry, as well as apparel, department stores and the like) but overall the message was growth. Electronic stores possibly had one of the best months with an impressive growth of 1.1 percent in May. Health, wellness and personal care jumped too. Another high gainer was “nonstore” (online, catalogue, direct) retail sales, with a statistic growth of 1.4 percent for May.
According to a recent Market Watch article, this:
“may allow the Federal Reserve to wait a bit before cutting interest rates. After the weak job report for May, some economists thought the Fed might ease as soon as next week to bolster what was perceived as a slowing economy. The market is now expecting the Fed to cut rates in July. Some prominent economists, like the team at Goldman Sachs, think expectations of a rate cut over overdone and the central bank will remain on hold this year.”
The hope of course was that this trend would continue but earlier this month it seemed that “renewed trade tensions tapered optimism and smaller gains in employment suggested slower economic growth.”