US retail sales fell 1.3% in May, chip shortage dings autos

Retail sales fell in May, dragged down by a decline in auto sales, likely due to fewer cars being made amid a pandemic-related shortage of chips

NEW YORK -- Retail sales fell in May, dragged down by a decline in auto sales, likely due to fewer cars being made amid a pandemic-related shortage of chips.

Sales dropped a seasonal adjusted 1.3% in May from the month before, the U.S. Commerce Department said Tuesday. Wall Street analysts expected a smaller decline of 0.5%.

Economists expected retail sales to drop because of the lack of cars available for sale. Automakers are making fewer vehicles because of a worldwide chip shortage, which are needed to power in-car screens and other features.

Sales at auto dealerships fell 3.7% last month, according to the Commerce Department. Americans also spent less on furniture, electronics and home building supplies.