Weak US retail sales and manufacturing output signal a softening economy, impacted by Trump's tariffs

From Yahoo Finance: 2025-06-17 08:41:00

U.S. retail sales fell more than expected in May due to a drop in motor vehicle purchases. President Trump’s tariff policies are causing economic uncertainty, impacting consumer spending. Retail sales decreased by 0.9% last month, the largest decline since January, but increased 3.3% year-on-year.

Auto and parts sales dropped 3.5%, while online sales increased 0.9%. Sales at building material and garden equipment dealers fell 2.7%. Economists predict a slowdown in the second half of the year due to tariffs affecting disposable incomes. Wall Street stocks fell and the dollar rose against a basket of currencies.

Economic uncertainty is rising with slowing job growth and tariff-induced stock market volatility. Consumer spending is tracking at a 2.0% annualized rate this quarter. Import prices are expected to rise due to enacted tariffs. Manufacturing output edged up in May, but uncertainty around trade policy is hindering business investments.

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