An auto dealership in Totowa, N.J., displays a Tariff Free sign in April. (Ted Shaffrey/AP)
WASHINGTON— Retail sales fell sharply in May as consumers pulled back after a sharp increase in spending in March to get ahead of President Donald Trump’s sweeping tariffs on nearly all imports.
Sales at retail stores and restaurants dropped 0.9% in May, the Commerce Department said June 17, after a decline of 0.1% in April.
The figure was pulled down by a steep drop in auto sales, after Americans ramped up their car-buying in March to get ahead of Trump’s 25% duty on imported cars and car parts. Excluding autos, sales fell 0.3%.
The sales drop comes after sharp declines in consumer confidence this year. Still, inflation has cooled steadily and unemployment remains low, which could fuel steady spending in the coming months, as the economy has remained mostly solid.
Interesting breakdown on retail sales. Autos down after pre-tariff bump. Notable drop in building materials, restaurants and bars. Looks like consumers pulling back on discretionary spending, but still shopping online. pic.twitter.com/d6prJKzWwH
— Kathy Jones (@KathyJones) June 17, 2025
Sales dropped 2.7% last month at home and garden centers, 0.6% at electronics and appliance stores, and 0.7% at grocery stores. There were some bright spots: Sales rose 0.9% at online retailers, 0.8% at clothing stores, and 1.2% at furniture stores.
