US retail sales slid 0.5% in May, the US government said this afternoon in a much weaker than expected report. Wall Street economists had expected a monthly decline of 0.2% for May.
The Commerce Department said that, excluding car sales, retail sales fell 0.2%, compared with forecasts for a rise of 0.2%.
The decline followed a sharp 1.5% increase in April sales - a figure revised upward from an earlier estimate of 1.4%.
The fall in May was the steepest since June 2004, and, excluding cars, was the biggest decline since April 2004.
A major factor in the report was petrol prices, which fell sharply in May. Service stations saw a 1.6% drop in sales in May after a 2.2% rise in April. Car sales were down 1.6% after a 2% rise in April.
Compared with a year earlier, retail sales were up 6.4%, and 7.4% excluding cars.
Separate figures showed that US producer prices fell 0.6% in May, in a sign of easing inflationary pressures at the wholesale level.
Excluding food and energy costs, the so-called core producer price index rose 0.1%. Analysts had been forecasting a 0.2% drop in the headline index and a 0.3% gain in the core rate.
