Why Retail Sales Dipped 1.3% in May
While retail sales in May were down overall from April, clothing and clothing accessory sales were up 3%.
The National Retail Federation (NRF) is blaming supply chain constraints for a dip in May retail sales.
The U.S. Census Bureau reported June 15 that overall retail sales in May were down 1.3% from April but up 28.1% from May 2020. The year-over-year increase for May was unusually high because most stores were closed by the pandemic in May last year. Despite occasional month-over-month declines, sales have grown year over year every month since June 2020, according to Census data.
NRF’s calculation of retail sales — which excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed May was down 1.2% from April but up 17.3% year over year. May sales as calculated by NRF totaled $388.6 billion, the second-highest level of spending on record, outpaced only by $414.7 billion in December.
“While May retail sales were down slightly, largely due to supply chain constraints, the more accurate indicator remains in the year-over-year data which, as the NRF calculates, showed growth of over 17%,” NRF President and CEO Matthew Shay said. “For the first five months of this year, retail sales are already tracking 17.6% above the same five months of 2020, giving us further confidence in our newly revised sales forecast of growth between 10.5% and 13.5% to more than $4.44 trillion for 2021. While there are downside risks related to labor shortages, supply chain bottlenecks, tax increases and over-regulation, overall, households are healthier, and consumers are demonstrating their ability and willingness to spend. We are confident.”
NRF Chief Economist Jack Kleinhenz pointed to a “highly elevated level of spending, with dollar amounts in recent months some of the highest we’ve ever seen.” He said long-term trends in the number of dollars spent tell much more about the continuing economic recovery than whether sales were up or down from month to month.
“Demand has continued to be strong even as the concentrated impact from government stimulus has faded,” Kleinhenz added. “There is still pent-up demand for retail goods and consumers are likely to remain on a growth path into the summer.”
May sales declined month over month in two-thirds of retail categories but were up year over year in every category except grocery stores, led by usually large increases at retailers like clothing, electronics and furniture stores that were ordered to close last spring. Specifics from key retail sectors include:
• Clothing and clothing accessory stores were up 3% month over month and up 198.7% year over year.
• Electronics and appliance stores were down 3.4% month over month but up 90.8% year over year.
• Furniture and home furnishings stores were down 2.1% month over month but up 64.7% year over year.
• Sporting goods stores were down 0.8% month over month but up 40.9% year over year.
• Health and personal care stores were up 1.8% month over month and up 25.8% year over year.
• Building materials and garden supply stores were down 5.9% month over month but up 10.1% year over year.
• General merchandise stores were down 3.3% month over month but up 9.3% year over year.
• Online and other non-store sales were down 0.8% month over month but up 8.2% year over year.
• Grocery and beverage stores were up 1% month over month but down 0.2% year over year.