Tariff worries weigh on US retail sector

Auto sales plunge as consumers brace for higher prices amid trade uncertainty

The United States' retail sales fell more than expected in May for the second month in a row, as consumers showcased their anxiety over spending — particularly on cars — amid a period of uncertainty over tariffs, economists say.

Sales, not adjusted for inflation, dropped 0.9 percent last month — the most since the start of the year, the Commerce Department's Census Bureau reported last week. This, followed by a downwardly revised 0.1 percent drop in April, made it the second time there was a month-on-month decline since the end of 2023.

"Consumers are seeing their way through the uncertainty with trade policies, but I expect the inflation associated with tariffs to be felt later this year," Jack Kleinhenz, chief economist for the National Retail Federation, said in a statement.