Shoppers Hit the Brakes in May as Trade Jitters Linger
Retail sales softened in May and consumer sentiment remained near a record low as households contemplated the uncertain implications of the Trump administration’s still rapidly shifting tariff policies. Many of the steepest tariff proclamations have been delayed or tentatively negotiated downward, but even the most basic terms of potential final agreements remain highly uncertain. In this edition of KBRA’s commentary on retail sales, we discuss these uncertainties in the context of what remains a solid but cooling economic environment.
Key Takeaways
May retail sales declined 0.9% month-over-month (MoM) and were flat to declining in four of the last five months, signaling a cooling economic environment.
Headline Consumer Price Index (CPI) inflation increased slightly in May to 2.4% YoY, remaining near a post-pandemic low.
State sales tax collections from February to April exceeded inflation on an annualized basis in most states tracked by KBRA, demonstrating…
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