Consumers are turning to credit cards, their tax refunds and scrounging for coins under the couch cushions, but they still hit the stores and spent online last month even as high prices at the gas pump took their toll.
IRL spending at apparel and accessories specialty stores rose 5.7 percent from a year earlier in May, increasing to $26.8 billion, according to the Census Bureau’s monthly retail sales report, released Wednesday
The much smaller department store sector saw in-store sales increase 1.9 percent to $3.3 billion. More from WWD More and more of the spending is being fueled by plastic. Revolving consumer credit, a category of debt made up largely of credit cards, rose at an annual pace of 10.4 percent in April, when borrowers added another $14.2 billion to their balances, according to the Federal Reserve.
But spending from here on out could start to get dicier. “Following the strong tax refunds season, we expect consumer spending to turn more episodic and event-driven in the coming months,” said Michael Lasser, an analyst at UBS, in a note to clients. “Higher energy costs have likely shifted spending away from discretionary categories. That said, potential resolution in the Middle East could drive fuel prices lower, providing relief for stretched consumer budgets.” As U.S. President Donald Trump looks to hammer out a lasting deal with Iran, the fallout of three-and-a-half months of war in the Middle East is still snaking its way through the global economy.