U.S. retail sales fell for a second consecutive month in May, pulled lower by a sharp drop in gasoline prices. Excluding volatile gasoline sales, retail sales actually rose slightly, the government reported Wednesday. The Commerce Department said retail sales fell 0.2 percent in May, the same decline seen in April. The consecutive monthly declines were the first in two years. The May weakness was due to a 2.2 percent drop in sales at gasoline stations. Still, excluding gasoline sales, retail spending rose only 0.1 percent last month after falling 0.1 percent in April, leaving retail sales-excluding gasoline--basically flat for the two months, indicating that slower job growth and tiny wage increases may be leading consumers to reduce spending. Consumers did spend more in May on big purchases. Sales of cars, furniture, and appliances all increased, suggesting consumers may be gaining more confidence in the economy. Moreover, lower gasoline prices could give consumers more to spend in coming months on other purchases that drive growth. Gasoline prices have declined since peaking in early April. The retail sales report is the government's first look at consumer spending, which accounts for 70 percent of U.S. economic activity. But economists are concerned that consumer spending may weaken if income growth does not revive. Workers' average hourly earnings have risen only 1.7 percent in the 12 months ending in May, well below the pace of inflation during the period. Job growth also has slowed since the beginning of the year.
