Retail and food service sales in the United States fell a modest 1.3% in May after rising sharply for most of 2021. The decline reported by the United States Census Bureau earlier this week is widely seen not as a setback in the country’s economic recovery, but rather as a symptom of it. As COVID restrictions are largely lifted and businesses reopen their doors, consumers are simply changing their spending habits, moving away from big-ticket items that many Americans bought with their stimulus money, to services that weren’t there. not available for much of last year.
Much of this service spending is not reflected in the retail sales report, but a significant service area is. As the following chart shows, food services and drinking places i.e. restaurants, bars, cafeterias, etc., have seen their sales rebound in recent months, with overall spending surpassing for the first time pre-pandemic levels in May.
Interestingly, the other retailers that turned the general trend in May were the ones hit the hardest by the COVID restrictions. Clothing stores, along with health and personal care retailers, continued to rebound in May as people socialize again, making it worth buying new clothes or cosmetics.