Retail sales plummet in May

Retail sales in May took their biggest dive in eight months, raising fresh doubts about the state of the nation’s recovery and the pace of long-term economic growth.

Sales in categories as varied as building materials and apparel fell 1.2% from April, according to the monthly report released Friday by the Commerce Department.

Compared with the same month a year ago, sales rose 6.9%.

The results were seen as troubling to economists because they had been expecting a slight increase from April. With consumer spending accounting for 70% of economic activity, sluggish buying patterns could stall a turnaround.

“Retailers have long recognized that it may be a long uphill climb to full recovery, but [Friday’s] report suggests the climb may be steeper than we thought,” said Sandy Kennedy, president of the Retail Industry Leaders Assn. “Until the overall economic news improves and those Americans out of work find employment, meaningful retail sales growth will be difficult to achieve.”

Auto sales fell 1.7% in May; sales at hardware stores plunged 9.3%; department store sales fell 1.8%; and general merchandise sales, which include retailers such as Wal-Mart, fell 1.1%.

Gasoline station sales were down 3.3%, reflecting in part lower gas prices during the month.

The bright spot came from nonstore retailers, which includes online, which saw sales rise 2%. Year-over-year, nonstore retail sales rose 15.6%.

Last week, major chain stores released their own May sales figures that showed uneven results. Retailers including Costco Wholesale Corp., J.C. Penney Co. and Abercrombie & Fitch Co. reported year-over-year sales figures that missed expectations.

In a troubling sign, teen chains made up the weakest sector, with every retailer except Aeropostale Inc. and Zumiez Inc. posting sales declines. Teens are often considered a good barometer of discretionary spending because they usually aren’t hampered by bills and debt.

Analysts blamed cool weather during the first half of the month, stubbornly high unemployment rates and a later Memorial Day, which probably pushed some summer purchasing into June.

andrea.chang@latimes.com