US Retail Sales Suffer Sharp Decline

17 June 2002

Underscoring recent pessimism about the strength of the US recovery, new figures from the Commerce Department show a larger-than-expected drop in May’s retail sales.

Confounding analysts’ predictions of a 0.3% drop, sales actually sank 0.9% last month – the sharpest fall since November, but a 2.2% rise on May 2001.

Rising sales of furniture and electronics last month could not make up for falling demand for cars, building material, petrol and clothing. Indeed, car dealerships saw business decline 2.5%, the biggest drop since January.

The figures prompted predictions that the Federal Reserve will keep interest rates as they are.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff