US May retail sales sluggish

US May retail sales showed a sluggish increase, and a downward revision to April’s data suggests a less robust economic performance in Q2. However, the slowdown might be overstated. Lower gas prices likely dampened sales at stations, contributing to the weaker figures.

Despite this, inflation and rising interest rates are putting pressure on consumers. Many are focusing on necessities and reducing non-essential spending. This tepid spending trend strengthens the idea, among some economists, that the Federal Reserve might cut interest rates sooner, possibly by September. Just last week, the Fed projected only one rate cut this year, likely in December.

Attribution: Reuters