Chicago Fed projects US retail sales fell 0.3% in May, marking seventh decline in nine months

The Chicago Federal Reserve’s preliminary CARTS report, released June 8, projects US retail and food services sales excluding autos declined 0.3% in May on a seasonally adjusted basis. This marks the seventh consecutive monthly drop in nine months, signaling persistent weakness in consumer spending. The CARTS projection aggregates high-frequency data from payment card transactions, retail foot traffic, gasoline sales, and consumer sentiment to estimate retail activity before official government figures. Real retail sales, adjusted for inflation, are projected to have fallen 1.3% in May, reversing April’s 0.5% growth. The official US Census Bureau retail sales report is scheduled for June 17. Consumer spending accounts for roughly two-thirds of US GDP, making retail sales a key indicator of economic health. The 1.3% real decline suggests that higher prices are eroding purchasing power, as nominal sales fell only 0.3%. This trend could influence Federal Reserve policy decisions, potentially pushing the central bank toward a more accommodative stance. The Chicago Fed’s projection highlights growing concerns about consumer weakness, which may impact risk assets like crypto. Investors will closely watch the June 17 Census report for confirmation and revisions to prior months, as persistent declines could signal broader economic slowdown risks.