May retail sales unexpectedly fall
Retail sales unexpectedly fell in May, showing that consumers took a look at the falling stock market and uncertain economic conditions abroad and socked their money away instead of spending it.
According to the Commerce Department, purchases dropped 1.2 percent last month, the biggest drop since September 2009. This comes after a 0.6 percent rise in consumer spending in April.
Consumer spending makes up nearly 70 percent of U.S. GDP. In good times, spending drives the economy. But spending is even more important in this wobbly recovery, which so far is relatively jobless. Or at least private-sector jobless. In other words, with unemployment hanging near 10 percent, we're not hiring ourselves to recovery. We need to spend ourselves to recovery, and in May, we weren't.
Forecasters were expecting retail sales to climb by 0.2 percent.
Big losers last month were autos and building-materials. Automobile purchases dropped 1.7 percent last month.
If, however, you remove autos, building-material stores and gasoline, retail sales were essentially flat last month, edging up 0.1 percent.
June 11, 2010; 8:40 AM ET
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Posted by: halozcel1 | June 11, 2010 10:02 AM | Report abuse
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