You really are a stupid girl.
May Retail Sales Rise, But June Looks Even More Optimistic
Retail and food services sales were up 0.3% for
May compared to April and ahead of last year by 1.6%, showing that while many economic indicators suggest a slowdown in spending, consumers keep purchasing. Consumers spent nearly 4% more than last year (seasonally adjusted) for total retail and food sales minus gasoline and automobiles.
June consumer outlook is positive
Early summer travel, an additional holiday, no interest rate hike by the Fed in June, and lower gas prices than last year all lead to optimism for consumer spending in June. As travel restrictions lightened up with the official end of the COVID pandemic, people are planning to spend more time with family and friends and more money on travel and get-togethers.
Consumer spending strong in some categories
Digital sales were up 6.5% from last year. “It’s no secret that Americans love convenience, and with shipping prices continuing to go down, lots of shoppers find it more convenient to shop online than in stores,” said Jonathan Silver, CEO of Affinity Solutions.
Consumers have shifted spending to value chains, discount stores, travel, entertainment, and groceries. Restaurants and bars were up 8%, and discount stores, warehouse clubs, and grocery stores were up 3% compared to May 2022. Groceries are a primary driver of customer visits to discount stores and warehouse clubs.
The increase in grocery sales can be partly attributed to rising prices. While grocery prices were up 5.8% for the rolling 12-month period ending May, there is only a slight increase in prices for the month. In May, there was a decrease in some significant items; for instance, egg prices were down 13.8%, the largest drop since January 1951. Meats, poultry, fish, and dairy products all showed declines in prices for May, according to the Consumer Price Index (
CPI).
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Apparel, accessories, and shoes show the same spending levels in May of 2023 and compared to April. Department store sales are slightly ahead of last month at plus 0.3%, but down 4% compared to the previous year.
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Spending on credit and debit cards is high
“Consumers are spending like they have a hole burning in their pocket. May was the first month this year where spending was up in all categories except gas (and gas was way up after adjusting for price decreases). Our data shows consumer spending in the U.S. increased 8.9% year over year in May. That’s compared to 7.8% in April this year and just 1.8% in March. The increase in May is the largest monthly year-over-year spending increase since September 2022,” said Silver. “Consumer spending at online retailers (including Amazon) once again outpaced growth in-store with a dramatic 35% year over year increase in annual sales, the biggest increase of the year, well beyond any impact from inflation.”
Consumer spending on credit and debit cards in the U.S. increased 8.9% year over year in May, ... [+]
GETTY
Although the Fed raised interest rates throughout the year, except this month, in hopes that consumer demand would wane, consumers continue to spend. “This could lead to sticky inflation that is much harder to come down from than the highs of last summer; the good news is we’re seeing inflation coming down and spending increases,” said Silver. Affinity Solutions tracks spending on over 140 million credit and debit cards across 8.8 billion transactions
Elongated Weekend in June
This year, at least 28 states and the District of Columbia will legally recognize
Juneteenth as a public holiday meaning state government offices are closed and state workers have a paid day off. The newest federal holiday celebrates the end of slavery in the United States. Father’s Day and Juneteenth fall on the same weekend giving many Americans a four-day weekend in the middle of June.
Annual sales growth measured a substantial 24% increase in total consumer spending the week of Juneteenth from 2020 to 2021, when it became a federal holiday. In 2022, sales were up 15% the week of Juneteenth and are expected to follow the same pattern, according to Silver. “Given the extra weekend day and since it's back-to-back after Father’s Day, we might expect to see more purchases of gifts, clothing, hobby, and sporting goods items.”
The long holiday weekend in June will boost family gatherings and consumer spending. Consumers will collectively spend a record-high $22.9 billion to celebrate
Father’s Day this year, according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics. Total expected spending for the holiday is up from last year’s $20 billion, surpassing the previous record of $20.1 billion in 2021.
Summer Travel May Boost Consumer Spending
Gas spending is down nearly 20% compared to last year and 2.6% less than in April, according to the U.S. Census Bureau. Year-over-year decreases are mainly attributed to a fall in gas prices, reflecting the current national average of $3.56, which is $1.39 less than a year ago. “Consumers are hitting the road more as deflation eases prices at the pump,” stated Silver. The gasoline demand has risen for the third consecutive week, indicating that summer
travel has started early this year. Consumers are facing a summer with reduced travel restrictions since the COVID pandemic was officially declared over in early May. With 63% of U.S. adults planning to
travel this summer, airlines are bracing for high demand and possible service disruptions.
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