Consumer spending regains some momentum in May
Adjusting for seasonality and prices, spending excluding energy grew 2.8% in May compared to April, lifted by both retail and service spending. The increase comes after some very weak months of 2025 so far.
After services spending softened in the first months of 2025, May saw a rebound with stronger spending in restaurants and nightlife. Data on holiday related spending is more affected by fluctuations due to price adjustments but have also shown signs of recovery. Concerts, theatres and tourist attractions have, however, been weakening steadily in recent months – including in May.
In retailing, spending generally picked up in real terms, though there was a slight downtick in real grocery spending in May, and a significant drop in DIY stores. For groceries, further price increases have dampened real spending, though it continues to increase in nominal terms. Spending regained strength, particularly in household and appliance stores as well as jewellery stores in May.
Overall, May was a month of positive spending growth, coming off a period of otherwise weak spending since the turn of the year. The pickup in spending defies the very weak consumer sentiment, which has only deteriorated further in recent months. We still see consumers being more cautions, but today’s figures confirm that the tailwinds to household finances from rising real incomes and continued strength in both the housing and labour markets, should be able to drive some consumption growth, defying the headwinds from global turmoil and inflation fears.
Author
Danske Research Team
Danske Bank A/S
Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.
