WASHINGTON – Americans cut back on gas stations, department stores and electronics shops in May as retail sales recorded their largest decline in 16 months, a cautionary sign for the economy.
The Ministry of Commerce said Wednesday that retail sales fell 0.3 percent, the first decline since February and the lowest since a 1 percent decline in January 2016. Economists had expected sales to increase slightly in May after an increase of 0.4 percent in April.
In the past year, retail sales increased a solid 3.8 percent.
In the last month, sales were down 2.8 percent at electronics stores, the largest such decline since March 2016. They fell 2.4 percent at gas stations and 1 percent at the department stores, which have struggled with competition from online retailers.
Economists have said that they think that consumer spending, which accounts for about 70 percent of U.S. economic activity, pick-up in the spring and summer after a slow start to 2017. A decrease in consumer spending in the beginning of this year is a major reason why the economy expanded at just a lackluster 1.2 percent annual pace from January through March.
The Trumpet administration has said that to accelerate the economic growth of 3 percent a year by cutting taxes, loosening regulation, and deposit money into roads, bridges and other infrastructure projects.
But President Donald Trump of the agenda is held by political unrest and a lack of information from the administration. And economists are skeptical that Trump was able to overcome longer-term problems that weigh on the economic growth, including an aging workforce and a slowdown in productivity.