Census retail sales data shows consumers ‘seeing their way through’ tariffs but impact could come later

Data released today by the U.S. Census Bureau showed continued growth in core retail sales — which exclude autos, gas and restaurants — in May despite a downturn in overall sales amid on-again, off-again tariffs on imported merchandise, National Retail Federation Chief Economist Jack Kleinhenz said.

“We’re continuing to see growth for core retail sales this year at about the same pace as last year,” NRF Chief Economist Jack Kleinhenz said. “Despite a soft labor market, aggregate consumer spending has been supported by wage gains and an improvement in the stock market. Consumers are seeing their way through the uncertainty with trade policies, but I expect the inflation associated with tariffs to be felt later this year. Consumers remain very price sensitive, and those costs are likely to weigh heavily on consumer budgets.”

The Census Bureau said overall retail sales in May were down 0.9% seasonally adjusted month over month but up 3.3% unadjusted year over year. That compared with a decrease of 0.1% month over month and an increase of 5% year over year in April.

May’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.1% seasonally adjusted month over month and up 3.9% unadjusted year over year. Core sales were up 4.4% year over year on a three-month moving average and up 3.9% for the first five months of the year.

Last week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that core retail sales were up 0.23% seasonally adjusted month over month in May and were up 4.2% unadjusted year over year. That compared with increases of 0.9% month over month and 7.11% year over year in April.

As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.