U.S. retail sales fell unexpectedly in May, mainly due to a decline in motor vehicle purchases after a surge prompted by fears of tariff-induced price hikes. This decline, the largest in four months, along with moderate job growth, signals a potential softening of domestic demand. Despite this, solid wage growth continues to support consumer spending. The Federal Reserve is expected to keep interest rates unchanged while navigating the uncertainties caused by tariffs and rising Middle Eastern tensions. Economists anticipate a more significant slowdown in consumer spending later in the year as the effects of tariffs impact disposable incomes.
U.S. retail sales dropped more than expected in May due to lower vehicle purchases, while consumer spending remains stable due to solid wage growth.
Despite declining sales, consumer spending is currently supported by wage growth, but a marked slowdown is anticipated in the second half of the year.
Economists predict that consumer spending growth may track at a 2.0% rate this quarter, reflecting resilience despite potential economic headwinds.
Tariff uncertainties have complicated economic planning for businesses. In particular, the automobile market has seen shifts in purchasing patterns due to these dynamics.
Collection
[
|
...
]