Consumer spending on clothing and footwear ticked up 0.4 percent in May to $430.19 million compared to April, marking the third straight month of increases after falling in February, according to estimates released Friday by the U.S. Bureau of Economic Analysis (BEA).
However, the increase in clothing and footwear spending did represent a slowdown from the 1.2 percent gain posted in April compared to March and could reflect economist’s predictions of a slowing U.S. economy. IHS Markit’s June projection for U.S. gross domestic product (GDP) growth was for it to slow to 1.5 percent in the second quarter, and average 1.8 percent through the second half of 2019–several tenths of a percentage point below may’s forecast.
The BEA report is in line with the Commerce Department’s reading that showed retail sales rose a seasonally adjusted 0.5 percent. Jack Kleinhenz, chief economist at the National Retail Federation said those numbers “reinforce the ongoing strength of the consumer.”
“The strong job market, recent income gains and elevated confidence translates into ongoing support for spending,” Kleinhenz said. “Households, in the aggregate, are in solid financial condition but an escalation in trade tariffs will undoubtedly create a considerable downdraft to confidence and spending, or lead to a pullback in spending.”
Overall personal consumption expenditures (PCE) also increased 0.4 percent, or $59.7 billion, last month, while real PCE, adjusted for inflation, was up 0.2 percent, BEA reported. The PCE price index was also up 0.2 percent.
The $32.9 billion increase in real PCE in May reflected an increase of $18.5 billion in spending for goods and a $15.8 billion increase in spending for services. Within goods, new motor vehicles were the leading contributor to the increase, as the largest contributor to the gains in services was spending for food services and accommodations.
Personal income rose 0.5 percent, or $88.6 billion, in May according to estimates released Friday by the Bureau of Economic Analysis. Disposable personal income (DPI), a key barometer for retail sales, also increased 0.5 percent, or $72.6 billion, and personal consumption expenditures (PCE) advance 0.4 percent, or $59.7 billion, in the month.
Real DPI was up 0.3 percent in May with the uptick primarily coming from increases in personal interest income, wages and salaries, and government social benefits, BEA noted.
Personal outlays rose $62.1 billion in May, as personal saving was $985.4 billion. The personal saving rate–personal saving as a percentage of disposable personal income–was 6.1 percent.