Shoppers Slammed On The Brakes In May

Retail sales fell in May for the first time in 11 months, dragged down by a sharp drop in receipts from auto dealerships, according to a government report that could raise fears of a prolonged economic slowdown.

Total retail sales slipped 0.2 percent, the Commerce Department said on Tuesday, after a downwardly revised 0.3 percent increase in April.

Economists polled by Reuters had forecast retail sales falling 0.4 percent from April's previously reported 0.5 percent rise.

In the 12 months to May, retail sales were up 7.7 percent.

Retail sales last month were depressed by a 2.9 percent drop in sales of motor vehicles, the largest decline since February 2010, as a shortage of parts following the earthquake in Japan left inventories lean and prompted manufacturers to raise prices.

Excluding autos, retail sales rose 0.3 percent last month, the smallest gain since July, after rising 0.5 percent in April.

The report was the latest in a series of weak data to show the lull in economic activity extending well into the second quarter. The economy started the year on a soft note beset by bad weather and rising oil prices.

A report earlier this month showed U.S. employers added a scant 54,000 workers to their payrolls in May.

Economists pin much of the recent weakness on high gasoline prices and supply chain disruptions from the earthquake and tsunami in Japan and say a new recession is not in the offing.

Receipts at gasoline stations rose 0.3 percent after increasing 1.4 percent the prior month. Excluding gasoline, retail sales fell 0.3 percent after gaining 0.1 percent in April.

The report painted a generally weak picture of consumer spending, with sales at food and beverage stores falling 0.5 percent, while receipts at sporting goods, hobby, book and music stores dropped 0.4 percent. Sales of electronics and appliances fell 1.3 percent, the largest decline since March 2010.

However, clothing store receipts edged up 0.2 percent last month, while sales at building materials and garden equipment suppliers rose 1.2 percent.

Core retail sales, which exclude autos, gasoline and building materials, rose 0.2 percent in May after advancing 0.3 percent in April. Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 2.2 percent annual pace in the first quarter.

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  • by Pete Location: Grifton on Jun 15, 2011 at 01:02 PM
    Alright retailers how is that change working out for you? jingle jingle.
  • by Kane on Jun 15, 2011 at 12:18 PM
    But wait, we in North Carolina can do something about this. Now that the GOP Legislature has done away with that albatross of sales tax, we have money to burn. What to do this year with my extra $43.20?
    • reply
      by Bob on Jun 15, 2011 at 01:32 PM in reply to Kane
      Good question. You sure won't be able to send your kids to a UNC campus on it.
  • by Common Sense Location: E NC on Jun 15, 2011 at 10:33 AM
    The new Republican congress promised to focus on the economy, and they did. They focused on stopping economic growth so they can blame Obama.
    • reply
      by Anonymous on Jun 15, 2011 at 01:25 PM in reply to Common Sense
      Obama is trying to stop growth. FOR EXAMPLE-Obama’s NLRB (being pushed by obama’s union buddies) is the one trying to stop Boeing from building a production plant in South Carolina (a right to work state.). obama has also made it very clear that anyone trying to open or maintain a coal fired energy producing plant can try, but obama’s EPA will do their best to bankrupt(thru more and more regulations)in the process. obama’s Attorney General, Eric Holder, thru ATF operation “Fast and Furious” has allowed more weapons to enter Mexico, from the US.(An attempt by obama and holder to strip US citizens of their 2nd Amendment rights.)obama also wants gas to reach the same price that Europeans pay. There by putting middle and lower class American in a deeper financial crunch (and trying to force US citizens’ to by electric cars which they can’t afford and the car companies wouldn’t be able to sell otherwise.)
  • by They have it Location: NC on Jun 15, 2011 at 09:01 AM
    The folks on MediCAID are the only ones that can afford to shop. That's where all the money has gone.
    • reply
      by Anonymous on Jun 15, 2011 at 10:31 AM in reply to They have it
      You need to make something like $900 to $1,600 a month to be eligible in NC... I am sure they are all out buying with all that cheddar.
    • reply
      by Common Sense on Jun 15, 2011 at 10:35 AM in reply to They have it
      Yeah, the poor folks on Medicaid are all getting 400 million dollar bonuses for bankrupting companies and moving jobs to China.
  • by Anonymous on Jun 15, 2011 at 06:17 AM
    But how can this be when corporations are posting record profits?... oh thats right... They fired everyone and replaced them with Indian and Chinese workers... I almost forgot... Because record profits are what makes america great...
    • reply
      by BF on Jun 15, 2011 at 08:06 AM in reply to
      Government is broke and people wonder where the money is. It's in the corporations' bank accounts. They won't turn it loose because they're "uncertain." If the money were in the US (or NC) Treasury, the government would let contracts to small businesses so they could hire people.
    • reply
      by Anonymous on Jun 15, 2011 at 10:14 AM in reply to
      Record profits, not hiring, and the Republicans still want to give them Tax Breaks! Why? so they can invest the money in business over seas.
    • reply
      by Bob on Jun 15, 2011 at 12:27 PM in reply to
      In a recession, the economy's last line of defense is government spending for small business contracts and employment. Though unpopular, the CCC and WPA were largely responsible for pulling the US out of the Great Depression. It's the strangulation of government spending by the Republicans that is causing the economy to begin slipping back into recession. They are depending on the failed economy policy of "trickle down." Even Ronald Reagan finally admitted that it doesn't work. Excess of cash does not stiumlate a corporation to hire; it stimulates them to save. Hiring will occur when the economy is already strong and consumers are buying, even if the corporation must borrow to do. The Republicans are solely responsible for the coming Great Depression II.
  • by FRANK on Jun 15, 2011 at 05:54 AM
    a few groceries are about all we are able to buy now. . . don't mean to let you down economy but most Americans are living in survival mode.
  • by Dawg on Jun 15, 2011 at 05:28 AM
    With property taxes in Beaufort Co. going up again, there will be no more meals out, no more shopping trips, no more movies, etc.... Sorry merchants, the county commissioners are wrecking my budget because they cannot get theirs in order and you will loose business because of it.
    • reply
      by Anita on Jun 15, 2011 at 05:53 AM in reply to Dawg
      TOTALLY AGREE!!!! They all need to get out of office...they are wrecking what's left of Beaufort County! :/
    • reply
      by Silly Fish on Jun 15, 2011 at 07:30 AM in reply to Dawg
      Look at all the new land development tax money they got from the waterfront real-estate boom. With all that increased tax base and now raising taxes---and they still don't have they money they need?? OH, I forget they spent it all on the darn waterfront to drive tourism and home sales, because most folks in political office in BOCO are surveyors, real estate agents, appraisers,etc------so they spend our money to help them make money---makes sense?? Remember when they did not even have the money to run the school buses and fought the school system----because they wanted to spend money on downtown waterfront improvements instead of getting kids to school? Then we wonder why BOCO has such an education gap. Don't worry, no need for schools when BOCO becomes a retirement community--retirees don't have school age kids!!
  • by Anonymous on Jun 15, 2011 at 04:12 AM
    Seems to me the economy slowed/gas prices went up after the Republicans took control of the house in January.
    • reply
      by BF on Jun 15, 2011 at 08:03 AM in reply to
      It does seem that way, doesn't it? We had a modest recovery going on and then when they started governing, gas prices went up and talk of a double-dip recession began.
    • reply
      by Anonymous on Jun 15, 2011 at 09:21 AM in reply to
      Wait a minute. Another story on this website states that gas and food prices are going down. Now if you're trying to blame the republicans here for the fall of retail sales (because they took the house in January.), then don't they get credit for the price of food and gas going down also?
      • reply
        by Up hill battle on Jun 15, 2011 at 10:11 AM in reply to
        If they are going down, it has nothing to do with anything the Republicans have done to make it so. Remember, they bowed to do anything to make Obama fail, if Obama fails, the countries middle class fails also, but that small item doesn't matter to them.

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