In this file:
· Retail sales posted unexpected 0.3% decline in May as inflation hammers consumers
· U.S. mortgage interest rates jump to highest level since 2008
· Shoppers are buying less and switching to store brands, Kroger says
Retail sales posted unexpected 0.3% decline in May as inflation hammers consumers
Retail and food service spending posted a surprise 0.3% decline in May, below the estimate for a 0.1% increase.
Spending at gas stations led but was offset by declines elsewhere, according to numbers that are not adjusted for inflation.
Jeff Cox, CNBC
Jun 15 2022
Retail sales turned negative in May as consumers pulled back spending while inflation surged, the Commerce Department reported Wednesday.
Advance retail and food service spending fell 0.3% for the month, below the Dow Jones estimate for a 0.1% gain. Excluding autos, sales were up 0.5%, which fell short of expectations for a 0.8% increase.
The numbers are not adjusted for inflation, which increased 1% for the month on the headline number and 0.6% excluding food and energy.
Sales were well below the pace in April, which posted a downwardly revised 0.7% increase from the initial 0.9% estimate.
Spending for the month declined even though sales at gas stations increased 4% due to fuel prices that scaled new heights, with regular unleaded hitting $4.43 a gallon in May and now running around $5. That growth was offset by a 3.5% decline at motor vehicle and parts dealers.
Miscellaneous store retailers saw a 1.1% drop in sales...
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U.S. mortgage interest rates jump to highest level since 2008
Reporting by Lindsay Dunsmuir; Editing by Simon Cameron-Moore, Reuters
June 15, 2022
June 15 (Reuters) - The average interest rate on the most popular U.S. home loan climbed to its highest level since the 2008 financial crisis and purchase applications were down more than 15% from last year, Mortgage Bankers Association (MBA) data showed on Wednesday.
Still, more homebuyers sought properties compared to a week earlier, perhaps signalling a flurry of activity before aggressive tightening by the Federal Reserve further impacts the sector.
Fed policymakers later on Wednesday are expected to raise interest rates by 75 basis points in order to quell inflation running at a more than 40-year high. The abrupt move, following a worse-than-expected key inflation reading last Friday, would be the biggest U.S. interest-rate hike in decades. L1N2Y12O3
Expectations for Fed tightening have led to a surge in Treasury yields. The yield on the 10-year note acts as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose by 25 basis points to 5.65% for the week ended June 10, the highest level since late 2008, towards the end of the financial crisis and Great Recession.
The MBA said its Purchase Composite Index...
Shoppers are buying less and switching to store brands, Kroger says
By Nathaniel Meyersohn, CNN Business
June 16, 2022
New York (CNN Business) Decades-high inflation is changing US consumers' grocery habits.
Kroger, the nation's largest grocery store chain, said Thursday that budget-constrained shoppers were buying fewer items in stores, favoring Kroger's cheaper store brands instead of name brands, and switching from beef to pork.
"Rising inflation has consumers rethinking their shopping and eating habits," Kroger (KR) CEO Rodney McMullen said on a call with analysts. "We are seeing different shopping behaviors based on how individual customers are experiencing the current inflationary environment."
Kroger is the latest major chain to highlight consumer shifts in response to rising prices for food, gas, rent and other goods and services.
Record gas prices drove inflation to 8.6% for the 12 months ending in May, according to the latest Consumer Price Index, the government's main inflation measure. Prices for food purchased to eat at home rose 11.9%, the largest 12-month increase since 1979, with eggs up 32.2%, milk up 15.9% and poultry up 16.6%.
The typical US household is spending about $460 more every month than they did last year to purchase the same basket of goods and services, said Mark Zandi, chief economist with Moody's Analytics...
... Other discount chains also say they're attracting new customers seeking cheaper alternatives...