Revenues in retail sales drop sharply

Associated Press

WASHINGTON

Americans are pulling back on their spending, a trend that could slow the economic recovery if it continues.

A sharp drop in retail-sales revenue for May shows that shoppers remain cautious, and it could lead economists to curtail their expectations for growth.

Analysts cautioned against overreacting to Friday’s Commerce Department report. It could signal a return to modest growth after two unusually strong months fueled by tax refunds, rebates for energy-efficient appliances and higher gas prices.

The 1.2 percent plunge in sales revenue was the largest drop in eight months. But excluding three of the most volatile sectors — autos, building materials and gasoline station sales — the figures actually rose one-tenth of a percentage point in May.

And figures for some industries can vary depending on how they are calculated.

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