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June 15 (UPI) — Recent data released on Thursday shows that total retail sales in the U.S. economy have increased in May, indicating that consumers are steadfastly resisting inflationary pressures.
In the months of April and May, U.S. consumers spent more on retail items and at restaurants, as reported by the Commerce Department. The data reveals a month-on-month increase of 0.3% in total retail sales, excluding spending on gasoline, which saw a 0.6% surge during the same period.
Sales of building supplies and gardening items, reflective of the activities at major retailers like The Home Depot, experienced a 2.2% month-on-month increase in May.
Meanwhile, sales at gas stations faced a decline of approximately 10%, but sales of health and personal care products, such as those offered by Walgreens, saw an impressive increase of 7.7% in May. Additionally, consumers spent 4.6% more at grocery stores compared to April. These trends reflect the current state of consumer-level inflation.
The overall price of consumer items rose by 0.1% from April to May, with an annual increase of 4%. Price increases were seen in food at home (0.1%) and used vehicles (4.4% month-on-month), while there was a year-on-year contraction of 4.2% in used vehicle prices for May.
Core inflation, which excludes volatile items like food and energy, experienced a 5.3% annual increase. While inflation remains below the peak level of 9.1% recorded in June 2022, it should be noted that prices for housing and vehicles continue to show an upward trend according to ING, an investment bank.
In light of the current economic situation, the Federal Reserve announced on Wednesday that it will temporarily halt the increase of its target interest rate until further data is available to determine the direction of the U.S. economy.
In its latest forecast, the Federal Reserve projected sluggish growth in gross domestic product, with an estimated expansion rate of only 1.8% by 2025. The Fed’s preferred inflation gauge, Core Personal Consumption Expenditures, is not expected to reach the 2% target rate for another two years.
