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Canada News.Net
19 hours ago
- Business
- Canada News.Net
May sees sharp retail decline in US following pre-tariff buying spree
WASHINGTON, D.C.: Retail sales dropped sharply in May as consumer spending slowed after a strong start to the year, primarily due to concerns over President Donald Trump's looming tariffs on nearly all imports. The Commerce Department reported a 0.9 percent decline in overall retail sales—including stores and restaurants—marking a deeper drop than April's 0.1 percent dip and reversing March's substantial 1.5 percent gain. A major factor in the decline was a significant pullback in auto sales. In March, many consumers rushed to purchase vehicles ahead of the expected 25 percent tariff on imported cars. As a result, auto sales plunged by 3.5 percent in May. Even excluding autos, retail sales still fell by 0.3 percent. Despite the downturn, some underlying economic indicators remain stable. Inflation is easing, unemployment is low, and a narrower sales measure—excluding cars, gas, and restaurants—actually increased by 0.4 percent, suggesting consumers are still spending selectively on discretionary items. Economists caution against reading the May dip as a sign of broad weakness. Retail sales make up about a third of consumer spending, while the rest comes from services like healthcare, education, and housing. Many analysts still expect modest growth in consumer spending during the April-to-June quarter. Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said that while consumers are showing more caution, they haven't stopped spending altogether. She noted that, even amid uncertainty about tariffs, underlying demand remains resilient. Still, some sectors were hit hard. Home and garden store sales dropped 2.7 percent, while grocery, electronics, and appliance store revenues also declined. Restaurant and bar sales—a barometer of consumer confidence—fell 0.9 percent in May after rising in April. In contrast, online retailers saw a 0.9 percent increase in sales, clothing stores rose 0.8 percent, and furniture outlets gained 1.2 percent. Falling gas prices contributed to a 2 percent revenue drop at gas stations, offering some relief at the pump but also reflecting lower fuel demand. Businesses reliant on imported goods are increasingly impacted. Paul Cosaro, CEO of Picnic Time, said retail orders are down 40 percent compared to last summer, as tariff-related price uncertainty causes retailers to hold back. His company sources 80 percent of its products from China and has seen tariff costs triple—from about US$330,000 last year to $1 million this year—forcing a hiring freeze. Rising prices are reshaping consumers' shopping habits. Pennsylvania mother of three Liza Gresko said she now buys in bulk, chooses generic brands, and relies more on thrift stores to stretch her budget. Retailers are also adjusting, launching back-to-school promotions earlier to encourage spending before potential price hikes hit harder. While inflation remains manageable for now, companies like Walmart and Lululemon are already raising prices, signaling more challenging times may lie ahead.
The Age
5 days ago
- Business
- The Age
ASX set to slip as Wall Street falls; oil prices rise; $A slumps
US stock indexes are losing ground on Tuesday, while oil prices rise again. The S&P 500 was down 0.8 per cent in afternoon trading following signals that one of the US economy's main engines, spending by households, is weakening while Israel's conflict with Iran may be worsening. The Dow Jones lost 267 points, or 0.6 per cent, and the Nasdaq composite was 0.9 per cent lower. The Australian sharemarket is set to retreat, with futures at 4.53am AEST pointing to a loss of 34 points, or 0.4 per cent, at the open. The ASX dipped by 7 points on Tuesday. The Australian dollar slumped. It was 0.7 per cent lower at 64.71 US cents at 5.07am AEST. Treasury yields also fell in the bond market after a report said shoppers spent less last month at US retailers than the month before and than economists expected. Solid such spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends. Loading In April, some shoppers had rushed to buy automobiles to get ahead of President Donald Trump's tariffs. 'Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management Trump, meanwhile, left a Group of Seven summit early and warned that people in Iran's capital should evacuate immediately. It took only about eight hours for Trump to go from suggesting a nuclear deal with Iran remained 'achievable' to urging Tehran's 9.5 million residents to flee for their lives. Israel's continuing fight with Iran has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes.
Sydney Morning Herald
5 days ago
- Business
- Sydney Morning Herald
ASX set to slip as Wall Street falls; oil prices rise; $A slumps
US stock indexes are losing ground on Tuesday, while oil prices rise again. The S&P 500 was down 0.8 per cent in afternoon trading following signals that one of the US economy's main engines, spending by households, is weakening while Israel's conflict with Iran may be worsening. The Dow Jones lost 267 points, or 0.6 per cent, and the Nasdaq composite was 0.9 per cent lower. The Australian sharemarket is set to retreat, with futures at 4.53am AEST pointing to a loss of 34 points, or 0.4 per cent, at the open. The ASX dipped by 7 points on Tuesday. The Australian dollar slumped. It was 0.7 per cent lower at 64.71 US cents at 5.07am AEST. Treasury yields also fell in the bond market after a report said shoppers spent less last month at US retailers than the month before and than economists expected. Solid such spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends. Loading In April, some shoppers had rushed to buy automobiles to get ahead of President Donald Trump's tariffs. 'Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management Trump, meanwhile, left a Group of Seven summit early and warned that people in Iran's capital should evacuate immediately. It took only about eight hours for Trump to go from suggesting a nuclear deal with Iran remained 'achievable' to urging Tehran's 9.5 million residents to flee for their lives. Israel's continuing fight with Iran has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes.
The Hill
5 days ago
- Business
- The Hill
US stocks fall as oil prices return to rising
NEW YORK (AP) — U.S. stock indexes are losing ground on Tuesday, while oil prices rise again. The S&P 500 was down 0.8% in afternoon trading following signals that one of the U.S. economy's main engines, spending by households, is weakening while Israel's conflict with Iran may be worsening. The Dow Jones Industrial Average lost 267 points, or 0.6%, as of 1:50 p.m. Eastern time, and the Nasdaq composite was 0.9% lower. Treasury yields also fell in the bond market after a report said shoppers spent less last month at U.S. retailers than the month before and than economists expected. Solid such spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends. In April, some shoppers had rushed to buy automobiles to get ahead of President Donald Trump's tariffs. 'Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management Trump, meanwhile, left a Group of Seven summit early and warned that people in Iran's capital should evacuate immediately. It took only about eight hours for Trump to go from suggesting a nuclear deal with Iran remained 'achievable' to urging Tehran's 9.5 million residents to flee for their lives. Israel's continuing fight with Iran has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes. Crude prices climbed in their latest see-saw move after leaping roughly 7% on Friday and then calming on Monday with hopes that the fighting could remain relatively contained. A barrel of benchmark U.S. crude rose 3.5% to $74.29. Brent crude, the international standard, added 3.6% to $75.85 per barrel. Often, higher oil prices can help stocks of companies in the solar industry because they increase the incentive to switch to alternative energy sources. But solar stocks tumbled amid the possibility that Congress may phase out tax credits for solar, wind and other energy sources that produce fewer emissions that change the Earth's climate. Enphase Energy dropped 23.2%, and First Solar fell 18.3%. On the winning side of Wall Street was Jabil, which jumped 10.2% after reporting a stronger profit for the latest quarter than analysts expected. CEO Mike Dastoor credited strength from accelerated demand related to artificial-intelligence technology, among other things. Verve Therapeutics soared 78.9% after Eli Lilly said it would buy the company developing genetic medicines for cardiovascular disease in a $1 billion deal that could be worth up to $1.3 billion if certain conditions are met. Lilly's stock slipped 1.7%. All of the action was taking place as the Federal Reserve began a two-day meeting on interest rates. The nearly unanimous expectation among traders and economists is that the Fed will make no move. The Fed has been hesitant to lower interest rates, and it's been on hold this year after cutting at the end of last year, because it's waiting to see how much Trump's tariffs will hurt the economy and raise inflation. Inflation has remained relatively tame recently, and it's near the Fed's target of 2%. More important for financial markets on Wednesday will likely be the latest set of forecasts that Fed officials will publish for where they see the economy and interest rates heading in upcoming years. In the bond market, the yield on the 10-year Treasury fell to 4.39% from 4.46% late Monday. The two-year yield, which more closely tracks expectations for what the Fed will do with its overnight interest rate, edged down to 3.94% from 3.97%. In stock markets abroad, indexes fell across much of Europe after finishing mixed in Asia. Tokyo's Nikkei 225 index rose 0.6% after the Bank of Japan opted to keep its key interest rate unchanged. It's been gradually raising its rate from near zero and cutting back on its purchases of Japanese government bonds to help counter inflation. ___ AP Business Writer Elaine Kurtenbach contributed.
CNBC
12-06-2025
- Business
- CNBC
Watch CNBC's full interview with Morgan Stanley's Ellen Zentner, Charles Schwab's Kevin Gordon and Truist's Keith Lerner
CNBC's "Closing Bell" is joined by Ellen Zentner, chief economic strategist and head of thematic and macro investing at Morgan Stanley Wealth Management, Truist Wealth's co-chief investment officer Keith Lerner and Kevin Gordon, senior investment strategist at Charles Schwab, to discuss U.S. markets, their outlook for the U.S. and more.
