2026/07/21 | Julia Passabom & Mariana Ramirez
Real retail sales grew 1.6% YoY in May, well below both consensus (3.1%) and the previous reading (4.4%). On a seasonally adjusted basis, sales fell by 0.6% MoM, undershooting expectations (+0.1%) and reversing part of April’s gain (+0.7%). Six of nine subsectors contracted, led by household goods (-3.6%), leisure goods (-1.8%), and hardware and glass items (-1.8%), while healthcare products (+1.7%) and motor vehicles (+0.6%) posted gains. Underlying consumption fundamentals remain supportive, with the real wage bill rising 4.5% YoY and real consumer credit expanding 6.9% YoY as of May.
Our take: Today’s print, which is based on a revenue survey, adds to the list of weak domestic demand data. Activity remains soft in 2Q26, only showing a modest recovery coming from a weak 1Q26. Despite the disappointing May result, retail sales still point to positive momentum in 2Q, with growth running at 0.6% QoQ SAAR and a 2026 carry-over of 2.3%. Domestic demand remains the main drag on growth, reflecting weaker household consumption, softer labor-market dynamics, and the absence of significant World Cup-related spending.
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