Consumer spending on clothing and footwear fell for the third straight month in May, which the Bureau of Economic Analysis (BEA) said Friday was reflective of a $71.5 billion decrease in spending for all goods.
Personal consumption expenditures (PCE) for clothing and footwear declined a seasonally adjusted 1 percent to $474.64 billion in May compared to $479.31 billion in April and $486.6 billion in March. Overall PCE increased less than 0.1 percent, or $2.9 billion, for the month.
Real PCE, adjusted for inflation, decreased 0.4 percent–goods fell 2 percent and services increased 0.4 percent. Within services, increases were widespread, led by spending for recreation services, food services and accommodations, as well as housing and utilities. A decrease in spending on motor vehicles and parts was the leading contributor to the decrease in goods.
The PCE price index rose 0.4 percent. Excluding food and energy, the PCE core price index was up 0.5 percent. The PCE price index for May increased 3.9 percent from a year earlier, reflecting increases in goods and services. Energy prices rose 27.4 percent in the period, while food prices were up 0.4 percent. Excluding food and energy, the PCE core price index for May increased 3.4 percent year over year.
The BEA data was showed a similar trend to the Census Bureau monthly retail sales reported earlier this month and the National Retail Federation’s (NRF) calculations, which excludes automobile dealers, gasoline stations and restaurants to focus on core retail sales that had May down 1.2 percent seasonally adjusted from April.
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The Census Bureau reported that clothing and clothing accessories store sales were up 3 percent month-over-month seasonally adjusted in May.
“Demand has continued to be strong even as the concentrated impact from government stimulus has faded,” NRF chief economist Jack Kleinhenz said. “There is still pent-up demand for retail goods and consumers are likely to remain on a growth path into the summer.”
Personal income decreased 2 percent, or $414.3 billion, in May, according to BEA. Disposable personal income (DPI), a key barometer for retail spending, declined 2.3 percent, or $436.3 billion, and real DPI decreased 2.8 percent in May.
“The estimate for May personal income and outlays reflected the continued economic recovery, reopening of establishments and continued government response related to the COVID-19 pandemic,” BEA said. “The decrease in personal income for May reflected declines in pandemic-related assistance programs.”
Notably, BEA said economic impact payments made to individuals from the American Rescue Plan Act of 2021 continued, but at a lower level than in April. Unemployment insurance also decreased, led by declines in payments from the Pandemic Unemployment Compensation program.
Personal outlays increased $5.5 billion in May. Personal saving was $2.29 trillion in May and the personal saving rate–personal saving as a percentage of disposable personal income–was 12.4 percent.