Retail sales rose 7.19% in May despite inflation, tariff costs

Retail sales rose 7.19% in May, according to the National Retail Federation (NRF), better than the 5.73% gain in April. For the first five months of 2026, retail sales rose 6.29% compared with the same period in 2025. The data is not adjusted for inflation, and does not include auto dealer and gas station sales.

Core sales reported by the NRF increased 6.98% in May from a year ago. Core sales also do not include restaurant receipts. Year to date, core sales are up 6.19% from the same period last year.

“Retail sales maintained momentum in May, driven by a resilient labor market and consumers’ continued willingness to spend on retail goods despite pressure from elevated gas prices, tariffs and the conflict in the Middle East,” NRF President and CEO Matthew Shay said. “As support from this year’s large tax refunds fades, consumers are prioritizing essentials and finding creative ways to stretch their household budgets. To support them, retailers are actively engaging their supply chains and supplier networks to keep prices affordable.”

The U.S. Bureau of Labor Statistics on Wednesday reported inflation surged 4.2%, led by double-digit gains in energy costs, which filter down to other goods. While core inflation strips out energy and food costs, the rising prices do influence consumer spending on discretionary items, according to economists at Wells Fargo Securities, who also said services inflation remains elevated with no sign of slowing.

A report from National Retail Solutions (NRS) noted that same-store sales increased 4% in May, while the average cost of the top 500 items sold in May rose 2.3% year over year. NRS took data from its network of 39,600 active retail terminals nationwide, scanning purchases at approximately 34,300 retailers predominantly serving urban consumers.

NRS found that unit sales increased 1.8% from the previous month. Basket transactions per store decreased 2.7% from the prior month. This data mirrors what retailers like Walmart and Dollar General have said in recent weeks. Store traffic has been up slightly, but the basket size per trip is smaller. Walmart attributed this to higher gasoline prices, also noting that customers were buying 10 gallons or less of fuel at a time, for the first time since before the pandemic.

NRF reports that retail sales were higher in most categories last month compared to the year-ago period, despite persistent inflation and waning consumer confidence. Following are the NRF category reports, with percentages showing year-over-year change.
Electronics and appliance stores: up 11.59%
Clothing and accessories stores: up 10.25%
Health and personal care stores: up 8.87%
Sporting goods, hobby, music and book stores: up 8.59%
General merchandise stores: up 8.28%
Grocery and beverage stores’ sales: up 6.01%
Furniture and home furnishings stores: up 3.35%
Building and garden supply stores: down 1.88%