Retail sales drop 1.2 percent in May

WASHINGTON (AP) — Retail sales plunged in May by the largest amount in eight months as Americans slashed spending on everything from cars to clothing.

The big drop raises new worries about the durability of the economic recovery.

Spending fell 1.2 percent last month, the Commerce Department said today. Auto sales were down 1.7 percent but there was weakness in a number of areas. Excluding autos, sales fell 1.1 percent.

The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity.

Economists are concerned that households will start trimming outlays as they continued to be battered by high unemployment and a swoon in stock prices.

Investors have sold off stocks for more than a month because of concerns that Europe's sovereign debt crisis will slow a worldwide economic rebound. The Dow Jones industrial average fell 7.9 percent last month, the worst May for the blue chip index since 1940.

The decline in May retail sales was the largest since sales had fallen 2.2 percent in September. Analysts had been forecasting sales would be weak but remain in positive territory.