New York, USA – Retail sales in the United States are expected to face a challenging outlook for the second quarter of 2024. LSEG IFR Markets forecasts a modest increase of only 0.2% in overall and ex-autos sales for May 2024. This slow growth follows a 0.3% decline in April, indicating a sluggish start to the quarter.

Despite the slow overall growth expected, the control group is anticipated to perform slightly better with a 0.4% rise in sales. However, the recent decline in home sales since the beginning of the year suggests a limited demand for related goods. Unit auto sales saw a modest increase in May, reaching an annualized rate of 15.90 million, the fastest pace this year. Additionally, gas prices have moderated after a period of rapid increases.

Looking ahead to the second quarter of 2024, the LSEG Retail/Restaurant Index projects a blended estimated earnings growth rate of 6.6% and a blended estimated revenue growth rate of 1.6%. These growth rates represent a significant slowdown in consumer spending compared to the previous quarter. Within the consumer-related industries, the Broadline Retail sector is expected to record one of the highest estimated earnings growth rates at 51.0%, while the Personal Care Products sector is forecasted to have the weakest growth rate at -6.6%.

Discount levels for U.S. online retailers have seen a decline this year, according to data from LSEG and Centric Market Intelligence. Despite Memorial Day discounts in May, the year-to-date average discount penetration is now at its lowest point in over five years. In June, the average discount percent dropped to 34%, below the previous year’s 38.0%.

These trends in retail sales and discount levels reflect a changing landscape in consumer behavior and economic conditions. As the U.S. retail sector navigates through challenges in the second quarter of 2024, analysts will continue to monitor key indicators to gauge the health of the economy and consumer sentiment.