US Retail Sales Jump 0.9% in May as Consumer Spending Stays Strong/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. retail sales climbed 0.9% in May, exceeding economists’ expectations. Consumers continued spending despite elevated inflation and recent economic uncertainty. Lower gas prices, tax refunds and solid employment growth helped support demand.

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US Retail Sales Quick Looks

• Retail sales increased 0.9% in May.
• April sales were revised higher to a 0.4% gain.
• Online sales surged 1.5%.
• Clothing, furniture and accessory stores posted gains.
• Gas station sales were excluded in a separate measure that rose 0.7%.
• Restaurant spending slipped 0.1%.
• Inflation reached 4.2% in May, the highest level in three years.
• Consumers continue to power U.S. economic growth.
• Tax refunds and employment gains boosted household spending.
• Falling fuel prices may provide additional relief in coming months.

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Deep Look

US Consumers Keep Spending Despite Inflation Headwinds

American shoppers opened their wallets in May, pushing retail sales higher than expected and underscoring the resilience of the U.S. consumer despite persistent inflation pressures.

According to new Commerce Department data released Wednesday, retail sales increased 0.9% in May after a revised 0.4% rise in April. The stronger-than-expected performance highlights the continued strength of consumer spending, which remains the primary engine of the U.S. economy.

Excluding gas station sales, retail spending still advanced a healthy 0.7%, suggesting demand remained broad-based across multiple sectors.

Economists point to several factors supporting consumer activity, including robust employment growth, government tax refunds and easing fuel costs.

Broad-Based Spending Strength

Consumer spending gains extended across much of the retail landscape.

Clothing stores, furniture retailers and accessory shops all recorded stronger sales in May. E-commerce remained especially robust, with online spending climbing 1.5%.

However, not every category shared in the growth.

Electronics and appliance retailers posted modest declines, while department stores also saw softer demand. Restaurants—the only service category included in the report—registered a slight 0.1% decrease.

One closely watched metric, known as the “control group,” rose 0.7%. This measure excludes food services, automobiles, building materials and gasoline sales and feeds directly into calculations for gross domestic product (GDP).

The increase suggests consumer demand remained solid heading into the summer months.

Tax Refunds and Jobs Fuel Spending

Analysts say government tax refunds provided a temporary financial boost for households during April and May.

At the same time, continued job growth has supported household incomes and spending power.

According to Kathy Bostjancic, chief economist at Nationwide, consumers have remained resilient despite rising costs.

“The stronger-than-forecast and broad-based gains in May retail sales show that consumers continued to spend strongly despite higher gasoline prices in the month,” she said.

Bostjancic noted that tax reductions and improving employment trends have helped offset pressure from elevated fuel prices.

Still, economists caution that the impact of tax refunds may begin fading later in the year.

Inflation Remains a Challenge

The encouraging retail report arrives amid persistent inflation concerns.

Consumer prices rose 4.2% in May from a year earlier—the highest inflation rate in three years. Monthly inflation increased 0.5%, following sizable gains in March and April.

Higher energy costs have been a major contributor.

The conflict in the Middle East and disruptions around the Strait of Hormuz pushed oil prices sharply higher earlier this year, increasing costs for consumers and businesses alike.

Although a tentative agreement to end the Iran conflict has eased some concerns, experts warn that energy markets may take months to fully normalize.

Gas Prices Begin to Ease

Motor club AAA reported that the national average price for gasoline fell slightly to $4.02 per gallon, down 11% from a month earlier.

Even with recent declines, gas prices remain elevated historically and have not fallen below $4 per gallon since March.

Lower fuel prices could eventually provide additional relief to consumers and support spending in other areas of the economy.

However, businesses remain cautious.

Steve Lamar, CEO of the American Apparel & Footwear Association, said supply chain costs continue to pressure companies.

“While the deal is encouraging, our industry is still holding its breath,” Lamar said.

Retailers continue facing higher expenses for shipping, packaging and logistics, limiting profit margins even as consumer demand holds up.

Changing Consumer Habits May Persist

The surge in gasoline prices earlier this year appears to have altered shopping behaviors in ways that could outlast the current energy crisis.

According to Placer.ai, visits to gas stations operated by warehouse retailers such as Costco, BJ’s and Sam’s Club accelerated in early March as fuel prices climbed.

Consumers increasingly sought discounts and combined fuel purchases with bulk shopping.

Analysts say some of those habits may remain even as prices moderate.

The latest retail figures suggest that while Americans remain sensitive to higher prices, strong employment and improving energy conditions continue to support spending—a key factor for the broader economy heading into the second half of 2026.

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