US Consumer Spending Loses Momentum as Retail Sales Expected to Fall
The Chicago Fed projects a 0.3% month-over-month decline in retail and food services sales excluding autos for May, the largest drop since January 2025. After adjusting for inflation, sales are estimated to fall 1.3%.
The Chicago Fed's latest projection indicates a slowdown in US consumer spending. Retail and food services sales excluding autos are expected to decline by 0.3% month-over-month in May. If confirmed, this would be the largest monthly drop since January 2025 and the third-largest since March 2023.
This decrease follows a revised 0.7% increase in April and a 1.9% jump in March. After adjusting for inflation, real sales are estimated to fall by 1.3% in May, marking the steepest monthly decline since at least 2023. That would also be the seventh monthly decline in the past nine months.
The data underscores the strain on American consumers as high inflation continues to erode purchasing power.
Source: The Kobeissi Letter