Jun 17, 2025 - Business

Consumer spending drops in May as tariffs fuel anxiety

Courtenay Brown

American shoppers slowed spending in May, as retail sales fell 0.9% last month, the Commerce Department said on Tuesday.

Why it matters: The worse-than-expected figures come after consumers splurged on autos and other goods in recent months to beat tariff-related price increases.

It will be difficult for economists to parse whether this is a troubling sign for the economy — or if consumers simply pulled back after stronger spending earlier this year.

By the numbers: A drop in spending on autos and parts pulled down the May retail sales figure. Retail sales at motor vehicle shops fell by 3.5%, while spending at home appliance stores fell by 2.7%.

Spending at gasoline stations fell by 2%, likely a result of lower pump prices. The data is not adjusted for inflation.
April data was also revised lower; retail sales fell by 0.1% in the month, versus the 0.1% gain the government first estimated.

The intrigue: Consumers upped spending across other categories in May, including miscellaneous retailers, hobby shops and e-commerce stores and clothing retailers.

The control group figure — which excludes autos, gasoline, building materials and food services — rose by 0.4% in May.
That figure feeds into the GDP consumer spending category.

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Consumer spending drops in May as tariffs fuel anxiety

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