With ongoing uncertainty from the Administration regarding international trade, American consumers are anxious and have reduced their spending substantially in May.  

Retailers experienced their second consecutive month of plummeting consumer spending.

And the decline is growing.

After a slight decline of just -0.1% in April – May retail sales fell off the proverbial cliff, dropping almost 1%, coming in far worse than the estimates at -0.9%.

As expected, hefty tariffs on the auto sector have resulted in far fewer vehicle purchases. After a surge in March – to beat the April imposed tariffs, auto sales have seen some of the poorest sales numbers in recent years.

However, general retail sales also came in worse than expected. Removing autos, retail sales still dropped -0.3%, worse than economists’ predictions, which had expected a slight increase in sales.

Interestingly, restaurant and grocery spending also declined by -0.9% and -0.8%, respectively – consumers are being cautious with the limited funds they have.

In a sign of greater economic uncertainty, building materials also plummeted -2.7%, signalling a pullback on home renovations.

Ultimately, Trump’s ongoing trade debacle is causing the U.S. to head towards slower economic growth and worsening financial conditions for American families.