Consumer Spotlight Rising gas prices
FILE - A customer prepares to pump diesel fuel at this Madison, Miss., Sam's Club, Tuesday, May 24, 2022.
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U.S. consumers haven’t stopped spending since the Iran war drove up fuel prices. But company executives and retail analysts say many shoppers are reassessing what they buy and where. The behavior changes observed so far are subtle. They include drivers flocking to the fuel pumps at warehouse stores like Costco and Sam’s Club, but not filling up their tanks all the way. Market research firms say foot traffic is down at clothing and electronics stores. Executives from Walmart, McDonald’s and Dollar General have reported noticeable cutbacks by lower-income customers. Some economists and analysts expect a wider retrenchment as the cumulative impact of costlier gas, food and other products catches up with more people.
Consumer prices rose 4.2% in May from a year earlier, up from 3.8% in April and the third straight increase.
Shoppers stepped up their spending in May, surpassing economists’ expectations, as temperatures warmed and gasoline prices leveled off. Retail sales rose 0.9%, up from a revised 0.4% gain in April, according to new Commerce Department data released Wednesday. Sales got a boost from generous government tax refunds in both April and May, though economists say that cushion is starting to fade. Excluding sales at gas stations, retail sales in May rose 0.7%. Spending was broad-based. Business at miscellaneous stores, clothing and accessories stores and home furnishing and furniture stores all posted increases. Online sales rose 1.5%.
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