US consumers ramped up spending in May across a broad range of retailers, signalling that households powered ahead despite higher petrol prices.
The value of retail purchases rose 0.9 per cent, marking a fourth straight month of increases, Census Bureau data showed on June 17. The figures are not adjusted for inflation.
Receipts at petrol stations advanced 3.4 per cent, helping lift the headline figure as pump prices climbed in May due to the Iran war. Outside of receipts at petrol stations, sales rose a firm 0.7 per cent.
The report shows consumer spending strengthened heading into the summer even as average petrol prices rose to the highest level in almost four years. Companies have also noted that demand continues to hold up, with big-box retailers, including Target and Walmart, signalling that shoppers are resilient despite years of elevated inflation.
Eleven of 13 categories posted increases. Motor vehicle sales rebounded by 1.2 per cent, the biggest advance in almost a year, while spending at online retailers rose for a fifth straight month.
The figures are consistent with card data from Bank of America, JPMorgan Chase & Co and PNC Financial Services Group, which indicated that spending continued to advance in May alongside larger-than-usual tax refunds and a rising stock market.
Still, the card data suggests wealthier Americans are spending at faster rates, while lower-income households face tighter budgets and elevated borrowing costs.
Recent reports have also shown a decline in inflation-adjusted wages and a slide in the saving rate, and some retailers have emphasised that many consumers are seeking value when making purchase decisions.
The retail sales report showed so-called control-group sales – which feed into the government’s calculation of gross domestic product – were up 0.7 per cent. That measure excludes food services, auto dealers, building materials stores and petrol stations.
Spending at restaurants and bars, the only service-sector category in the retail report, fell 0.1 per cent in May after a strong increase in April. BLOOMBERG
