Americans are still making up for lost spending time, despite uneven sales levels seen by retailers and restaurants month-over-month since February.
Though retail sales in the US fell slightly by 1.3% in May as compared with April, according to government figures released Tuesday by the Department of Commerce, analysts generally aren’t worried about the renewed spending power of Americans.
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Shoppers continue to open their wallets following over a year’s worth of pandemic-related lockdowns. Last month, Americans spent $620.2 billion at retailers and restaurants, a decrease from April but an increase of 28.1% from May 2020.
From March through May, retail sales have risen 36.2% year over year, the data shows, and the government also revised April’s retail sales up slightly to an increase of 0.9% month over month.
Following March’s upwardly revised 11.3% month-over-month jump in sales — which saw a boost from government stimulus money most Americans received — and April’s modest increase, as well as when comparing May’s sales to May 2019, Ted Rossman, senior industry analyst at CreditCards.com, noted the “tremendous growth” seen.
The latest May numbers reflect “a sustained, strong level, especially since the last two months didn’t benefit from stimulus,” Rossman said in a written statement.
In May, sales from clothing and clothing accessories stores rose a staggering 200.3% versus May 2020 — when stores were largely shuttered due to the pandemic — and increased 3% from April, the government report showed.
“Clothing stores were the biggest winners in this month’s retail sales report, an indication of pent-up demand and Americans preparing to attend events and return to the office and other aspects of pre-pandemic life,” said Rossman.
By sector, department store sales in May rose 1.6% from the prior month and 28% year over year. At sporting goods and hobby stores, sales fell 0.8% from April, but jumped 44.1% from April 2020. General merchandise sales declined 3.3% month over month, but rose 10.3% year over year.
“Many consumers have very healthy balance sheets after saving more, spending less and paying down debt in 2020. Now that pent-up demand is starting to become unleashed, we could be off to the races,” said Rossman.
“Month-over-month comparisons and percentages of change simply don’t tell the story,” Jack Kleinhenz, chief economist at the National Retail Federation, said in a statement. “We are at a highly elevated level of spending, with dollar amounts in recent months some of the highest we’ve ever seen. Long-term trends in the number of dollars spent tell much more about the continuing economic recovery than whether sales were up or down from month to month.”
Market watchers largely expect retail sales to continue to grow, especially as the back-to-school shopping season kicks off next month. The NRF last week revised its annual sales outlook upward to as much as $4.56 trillion, which would be an increase of 13.5% from 2020 levels, reflecting the expected resiliency of consumer spending.
Separately, sales at food services and drinking places rose 1.8% from April, and when compared with 2020, sales in this category spiked 70.6%.