Evidence is mounting that the American shopper is cutting back

Sales at US retailers rose last month at a weaker than expected pace due to inflation and elevated interest rates. Retail sales increased by just 0.1% in May, better than April’s 0.2% decline but below economists’ projection of a 0.3% gain. Gas stations saw the biggest decline in sales, down 2.2% in May. Sales also dropped at furniture stores (-1.1%) and building materials and garden equipment shops (-0.8%). However, specialty stores selling sporting goods, books, and musical instruments saw a jump of 2.8% in sales. The figures for April and March were revised lower. Economists believe that the slowdown in spending could prompt the Federal Reserve to cut interest rates.