Retail sales fall for first time in 11 months

Retail sales fall for first time in 11 months
Auto sales lead the decline, core sales up slightly

By Greg Robb, MarketWatch


WASHINGTON (MarketWatch) — Sales at U.S. retailers decreased 0.2% in May to a seasonally adjusted $387.1 billion, the Commerce Department estimated Tuesday, further evidence that the economy has hit a soft patch.

This is the first decline in sales since last June. But details of the report were not all weak. While auto sales were down as expected, there was

some strength in building materials and miscellaneous stores. See full report.

Compared with May 2010, sales are up 7.7%.

Sales rose an downwardly revised 0.3% in April, compared with a 0.5% increase originally reported.

The sales are seasonally adjusted, but they aren’t adjusted for price changes.

A drop in sales in May was expected, based on earlier reports from auto makers. But the decline was not as bad as feared. Ahead of the report, economists surveyed by MarketWatch expected sales to fall 0.7%. See MarketWatch calendar with economic forecasts.

Excluding a 2.9% decline in motor vehicles sales, retails sales for the month rose 0.3%, stronger than the flat reading expected.

Sales at gasoline states rose 0.3% despite slightly lower pump prices. Excluding gasoline, sales fell 0.3%.

Excluding autos and gasoline, sales rose 0.3% in May.

So-called “core” retail sales, which exclude cars, gasoline, and building materials, rose 0.2% in May.

Retail sales account for about half of total consumer spending and about a third of final sales in the U.S. economy.

Economists don’t think that inflation-adjusted consumer spending for the second quarter will do much better than the 2.2 % rate recorded in the first three months of the year.
Details

Motor vehicle sales fell 2.9% in May after falling 0.7% in April. This was the largest decline since February 2010.

Furniture store sales fell 0.7%. Sales at electronics and appliances stores fell 1.3%.

Building materials and hardware store sales increased 1.2% after rising 0.5% in April.

Sales at the nation’s malls were lower in May. Sales at general merchandise stores fell 0.1%, including a 0.7% decrease at department stores. Sales at clothing stores rose 0.2%.

Sales at stores catering to leisure-time pursuits, such as hobbies, sports and reading, fell 0.4%.

Sales at health and personal-care stores rose 0.8%.

Sales at food and beverage stores fell 0.5%. Sales at restaurants and bars rose 0.6%.

Sales at non-store outlets, such as catalogs and online stores, rose 1.2%.

Greg Robb is a senior reporter for MarketWatch in Washington.