Retail sales in the United States grew at a slower pace in May but still came in stronger than expected, according to government data released Thursday, on the back of falling gas station sales.
The data point is the latest in a number of signals that the world’s biggest economy is cooling after 10 Federal Reserve interest rate hikes to ease demand and lower inflation.
On Wednesday, the US central bank held rates steady for the first time in over a year as it assessed the impact of previous rate increases on the economy.
In May, retail sales rose 0.3 percent from April to $686.6 billion, more than analysts had expected, the Commerce Department reported.
Driving this trend were lower sales at gasoline stations, down 2.6 percent from April and 20.5 percent from a year ago, the report showed.
But sales at motor vehicle and parts dealers were up 1.4 percent on a monthly basis.
Restaurant and bar sales also rose 0.4 percent last month, and were eight percent higher than a year ago.
The retail figures come shortly after consumer inflation data released this week showed that annual inflation at half the rate of its mid-2022 peak.
A nearly six percent fall in May consumer price inflation for gas would likely have dragged on gas station sales, said a report by Pantheon Macroeconomics.
While auto sales have risen over the past year as demand recovered, the Pantheon report added that “tighter lending standards and the rising cost of financing” will likely depress sales moving forward.
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