Forexpros – Retail sales in the U.S. fell for the second consecutive month in May, the first back-to-back- decline in two years, official data showed on Wednesday.
Core retail sales declined for the first time since January, adding to concerns the U.S. economic recovery is faltering.
In a report, the U.S. Census Bureau said that retail sales fell by a seasonally adjusted 0.2% in May, in line with expectations.
April’s figure was revised to a 0.2% decline from a previously reported gain of 0.1%.
Year-on-year, retail sales rose at an annualized rate of 5.3% in May, after advancing at a rate of 6.4% in the previous month.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude automobile sales, fell by 0.4% last month, the biggest decline since May 2010.
Analysts had expected core retail sales to post a flat reading last month, after falling by 0.3% in April, whose figure was revised from a 0.1% increase.
On an annualized rate, core retail sales rose 4.3% last month, after rising 5.1% in April.
Core sales correspond most closely with the consumer spending component of the government’s gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.
Following the release of the data, the U.S. dollar added to losses against the euro, with EUR/USD rising 0.31% to trade at 1.2543.
Meanwhile, U.S. stock future indices extended losses after the release of the data. The Dow Jones Industrial Average futures pointed to a loss of 0.35% at the open, S&P 500 futures pointed to a drop of 0.5%, while the Nasdaq 100 futures pointed to a decline of 0.4%.
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