May Sales & Tariffs

Census Bureau released the May retail sales figures on Friday. The report was particularly strong considering all the chatter of tariffs potentially slowing retail sales as price increases trickle down to consumers. April was revised upward from the initial report which drove the GDP estimates higher for many analysts.

The overall number for May was +3.2% from 2018 with winners being nonstore (online) posting the routine >10% increase, food services/restaurants, health and auto retailers. Those in the negative year over year were sporting goods, clothing, electronics/appliances and department stores.

Interestingly, the April number for electronics/appliances figure was positive in April but negative in May. Bespoke highlighted how the share of imports of steel and aluminum has already shifting away from China to Mexico and Vietnam to avoid the tariffs (see below). It may be too early to see the true impact of higher prices passed onto the consumer but this and jobs report were suprisingly strong.