Advanced Monthly Retail Trade Survey for May 2023

Jun 19, 2023 | Macro Insights, No Bull Economics

The Fed is looking hard for signs of a slowing economy, and unfortunately, retail sales are not cooperating.

Commentary

While advanced retail sales for May 2023 increased only 1.6% y/y, they accelerated to +0.3% m/m sequentially over April 2023 (which represents a +3.6% annual run rate).
Lower gas prices translated into lower spending at the pump (down -20.5% y/y and -2.6% m/m) which freed-up consumer spending in other categories – most notably, in building materials & garden as consumers spruce up their houses for their stay-cations (as referenced in this Dave & Buster’s post) and in auto repair (as referenced in this AutoZone post).
Notably, sequential spending also picked up for department and electronic stores while slowing online.
Also, sequential spending slowed sharply for health & personal care stores while moderating for grocery stores and restaurants.
In conclusion, it seems that relief at the gas pump helped finance pent-up demand for consumer spending categories in May that had previously been put on hold while the public traded-off discretionary spending for a full tank of gas.

Source: Monthly Retail Trade – Sales Report (census.gov)

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