United States May retail sales showed gains, to varying degrees, according to data respectively issued today by the U.S. Department of Commerce’s U.S. Census Bureau and the National Retail Federation (NRF).
Commerce reported that May retail sales—at $686.6 billion—headed up 0.3% over April and were up 1.6% annually. And it added that total retail sales, from March through May, were up 1.7% annually.
Retail trade sales were up 0.3% over April and up 0.7% annually. Non-store retailers, which includes e-commerce, headed up 6.5% annually, and food services and drinking place saw an 8.0% annual gain.
NRF reported that May retail sales, which does not include automobile dealers, gasoline stations, and restaurants, were up 0.4% over April and were up 4.4% on an unadjusted basis annually. And on a three-month moving average through May, NRF said that retail sales were up 3% annually on an unadjusted basis. And it also noted that through the first five months of 2023, retail sales are up 4.2% compared to the same period a year ago.
“This was a positive report with no sign of an abruptly slowing economy despite what has happened with inflation and interest rate pressures,” NRF Chief Economist Jack Kleinhenz said in a statement “Even though shoppers dialed back in some categories on a year-over-year basis, these numbers confirm that consumers still have the capacity to spend. Job growth and wages are providing buoyancy, although inflation continues to take a bite out of consumer income. May is typically a strong month for retail as spring shopping hits its peak, but above-average temperatures and below-average precipitation no doubt played a favorable role.”
NRF data pointed to May retail sales gains in six of the nine retail sectors it tracks, including:
In its 2023 retail sales forecast, which was issued in late March, NRF said it is calling for 2023 retail sales to see an annual increase between 4%-to-6%, coming in between $5.13 trillion-to-$5.23 trillion. This annual forecast, trails the 7% rate of annual retail sales growth seen in 2022, for a total of $4.9 trillion. And NRF said that the 2023 forecast tops the pre-pandemic, average annual retail sales growth rate of 3.6%.
2023 non-store and online sales, which are included in the total retail sales figure, are pegged to rise 10%-to-12% annually, coming in between $1.41 trillion-to-$1.43 trillion. This is in line with the 2022 forecast made by NRF a year ago, which called for a growth rate of 11%-to-13%, to between $1.17 trillion-to-$1.19 trillion. As previously noted, these figures continue to see major traction, which had been occurring well before the onset of the pandemic a little more than three years ago. But even with online and non-store sales growth continuing to see strong upside, NRF acknowledged that brick and mortar stores “remain the primary purchase point for consumers, accounting for approximately 70% of retail sales.”
Neil Saunders, managing director of GlobalData, wrote in a research note that while May came in ahead of April, which he called a “complete washout for retail,” the monthly numbers were viewed as a relief. But he cautioned that May’s rate of growth was well below the average growth rate of the past few years.
“From our data, May was helped along by a relatively strong Memorial Day holiday at the back end of the month which gave consumers something of an excuse to spend,” observed Saunders. “There was a modest uptick in people buying things for the garden, both for the weekend itself and in preparation for the summer ahead. There were also plenty of retail discounts and bargains on offer, which helped to stimulate sending. Our impression is that without Memorial Day, the sales numbers would have been materially weaker. This underlines an important facet of the current economy: namely that a growing reluctance to spend among those that have money is just as important as an inability to spend among those that don’t have robust finances. Retailers need to give permission and encourage shoppers into buying and events are one way of doing that.”