U.S. retail sales remain strong despite inflationary pressures

June 15 (UPI) -- Led by health and personal care, total retail sales in the U.S. economy increased in May, suggesting consumers remain defiant against inflationary pressures, data released Thursday show.

U.S. consumers spent more on retail items and at restaurants between April and May, with the Commerce Department showing a 0.3% month-on-month increase. Not counting what was spent at gas stations, retail sales jumped 0.6% from April to May.

Sales for building supplies and gardening items, reflecting activity at big-box retailers like The Home Depot, increased by 2.2% month-on-month to May.

Gas stations saw sales drop by around 10%, while health and personal care sales -- think Walgreen's -- increased by 7.7% to May. Consumers spent 4.6% more at grocery stores than they did in April. Those data points reflect recent trends in consumer-level inflation.

The price for all consumer items increased by 0.1% from April to May and the level was at 4% on an annual basis. The price for food at home increased by 0.1%, while the price for a used vehicle jumped 4.4% month-on-month, but showed a 4.2% contraction year-on-year to May.

So-called core inflation, which strips out volatile items like food and energy, was up 5.3% on an annual basis. Inflation is far below the 9.1% reading from June 2022, the highest level in more than 40 years, but investment bank ING said that the prices for items such as housing and vehicles "continue to run hot."

The Federal Reserve, however, decided Wednesday to take a break from running its target interest rate higher while it waits for more data to confirm where the U.S. economy is headed.

The Fed on Wednesday forecast sluggish growth in gross domestic product, expanding by only 1.8% by 2025. Core Personal Consumption Expenditure's, the Fed's preferred gauge of inflation, doesn't reach the 2% target rate for another two years.