Consumers pull back spending due to high gas and food prices
(CNN) -- The high cost of gas and food is causing US consumers to pull back spending on other items, suggesting a slowdown in the economy's main driving force.
The monthly reading on retail sales showed a 0.3% drop in May compared with April, the first decline in spending since December. More concerning is the details about where consumers are — and are not — spending money.
Spending at gas stations rose 4% in May from April, and is up 43.2% compared with a year ago, driven by sharply higher gasoline prices.
Spending at grocery stores, where prices are also higher, rose 1.2% compared with April, and 8.7% compared with a year ago.
Excluding spending at gas stations and grocery stores, spending at other retailers is down 1% compared with the previous month.
A strong job market and rising wages have kept consumers spending at a strong pace in recent months, but the shift to higher spending at gas stations and grocery stores is an alarm bell for the US economy. Consumer spending is responsible for about 70% of the nation's economic activity, and the retail industry overall has more jobs than any other business sector.
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