Consumer spending cooled in May, causing the biggest drop in retail sales in six months even as wholesale prices fell for a second month.
Retail sales fell 0.9 percent after a 1.2 percent April advance, the Commerce Department reported Thursday. Consumers cut spending on cars, clothes, and building and garden supplies. Lower gas prices also contributed to the decline.
Wholesale prices fell 0.4 percent in May, led by lower energy costs. Economists said the reports reinforced their view that the Federal Reserve will leave interest rates unchanged at its June 25-26 meeting. Keeping rates low might motivate shoppers and bolster economic growth.