Retail Sales Were Down in May. Time to Panic?

The Commerce Department reported today that retail sales in May were down 0.3 percent. But not really. Inflation was actually negative last month, so in real terms the decline was only 0.1 percent. It also means the decline wasn’t “the sharpest since a 1% decrease in January 2016.” There have been five declines in the past two years bigger than May’s, including a drop of 0.32 percent just three months ago.

So should we just relax about last month’s weak retail figures? I’ll let you decide. For the affirmative, there’s this chart:

Nothing much there, really. But for the negative, there’s this chart:

The trendline is pretty steadily down. Roughly speaking, this confirms my current belief that the economy is still doing OK, but a little less OK as time goes on. It seems like our nine-year expansion may be slowly running out of steam.

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