WASHINGTON – The U.S. Census Bureau announced on June 13 that estimates of U.S. retail and food services sales for May increased 0.1 percent from April and are up 7.6 percent from May 2005. However, the increase represents the “slowest pace in three months” as high gasoline prices have kept many consumers from spending, reports Bloomberg.
The news source writes that “soaring gasoline prices kept Americans out of car showrooms and a cooling housing market cut demand for building materials and furnishings,” adding that the slowdown in home-price appreciation and moderating wage growth is adding to the concerns of Americans “already stunned by higher pump prices.”
“Confidence is weak and job growth is sputtering a bit,” said Michael Gregory, a senior economist at BMO Nesbitt Burns in Toronto, adding, “The profile of a sluggish consumer is definitely going to continue.”
Bloomberg writes that the average price for all grades of gasoline increased to $2.95 a gallon in May from $2.79 a gallon in April. “Prices so far this month have stayed around May's levels and are up 29 percent since the beginning of the year, according to Energy Department statistics,” the news source adds.
According to recent Conference Board survey, rising energy prices “drove consumer confidence down” in May to the lowest level since September 2005. Bloomberg economist say consumer spending will rise at an annual rate of 2.5 percent this quarter, which is less than half the 5.2 percent gain in the first three months of this year.
Even Wal-Mart is not immune to high gasoline prices. Bloomberg reports that sales at Wal-Mart stores open at least a year increased 2.3 percent, but those figures are at the “low end” of the retailer’s forecast range.
“Fuel prices continue to be a top concern for our customers,'' said Wal-Mart CFO Tom Schoewe in a June 1 interview, noting that store traffic declined as more shoppers made less trips to the store and limited their spending on items such as food.
On the flip side, Bloomberg writes that consumer thriftiness is benefiting some low-price retailers such as CKE Restaurants Inc., which operates the Carl’s Jr. and Hardee’s chains.
“We're seeing people trading down from casual dining restaurants to fast food,'' said CKE Restaurants CEO Andrew Puzder in a June 6 interview, adding, “For us it's really been pretty good since about December.''