Retail Sales Off in May; 3rd Dip in 4 Months

Associated Press

Retail sales edged down 0.1% in May, the third setback in the past four months, as healthy demand for new cars and furniture failed to overcome weakness in other areas, the government reported Thursday.

The Commerce Department said retail sales totaled $117.05 billion last month, down $86 million from April.

Consumer spending, which accounts for two-thirds of total economic activity, has been in the doldrums much of the year. Sales dropped 0.1% in February and 0.4% in March before posting a 0.4% advance in April.

In other gloomy economic news, the government reported Thursday that U.S. businesses expect to cut spending for expansion and modernization by 1.3% this year, the first such decline since 1983.

The survey of investment plans completed in May found U.S. industry more pessimistic than two months earlier, when businesses expected to boost spending this year by a modest 0.9%.

Economists said the drop in business investment reflected how weak the economy has become. Many are looking for a rebound in the second half of the year.

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