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Consumers ‘Seeing Way Through’ Tariffs, NRF

[ June 20, 2025   //   ]

U.S. Census Bureau data released June 17 showed continued growth in core retail sales – which exclude autos, gas and restaurants – in May despite a downturn in overall sales amid on-again, off-again tariffs on imported merchandise, said National Retail Federation Chief Economist Jack Kleinhen.

“Despite a soft labor market, aggregate consumer spending has been supported by wage gains and an improvement in the stock market,” Kleinhen said. “Consumers are seeing their way through the uncertainty with trade policies, but I expect the inflation associated with tariffs to be felt later this year. Consumers remain very price sensitive, and those costs are likely to weigh heavily on consumer budgets.”

The Census Bureau said overall May retail sales were down 0.9 percent, seasonally adjusted month over month, but up 3.3 percent unadjusted year over year. That compared with a decrease of 0.1 percent month over month and an increase of 5 percent year over year in April.

May’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.1 percent seasonally adjusted month over month and up 3.9 percent unadjusted year over year. Core sales were up 4.4 percent year over year on a three-month moving average and up 3.9 percent for the first five months of the year.

Last week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported core retail sales were up 0.2 percent seasonally adjusted month over month in May and were up 4.2 percent unadjusted year over year. That compared with increases of 0.9 percent month over month and 7.1 percent year over year in April.

“Consumers remain very price sensitive, and those costs are likely to weigh heavily on consumer budgets,” said NRF Chief Economist Jack Kleinhen.

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