Autos Lead Drop in Retail Sales

Retail sales dropped 0.6% in May, the biggest decline in four months, the government reported today. The weakness was led by a 3.8% drop in auto sales, the largest monthly decline in that category since January.

Without the weakness in autos, retail sales would have risen only 0.3% as other categories posted either small increases or declines. The lackluster showing continued a pattern in effect since January, as American consumers cut back sharply on discretionary spending in the face of high debt burdens and sluggish growth in personal incomes.