Spending rebounded in May despite energy headwinds
Adjusting for seasonality and prices, spending excluding energy increased 1.5% in May compared to April, driven by higher spending across both services and goods. The increase follows a 1.0% m/m decline in April, but compared to May 2025, real spending excluding energy was 2.1% higher this year. The numbers indicate that although the Iran war continues to weigh on consumer sentiment, the rise in energy costs has not cannibalised other types of spending.
Retail spending rose an impressive 1.6% m/m in May after seasonal and price adjustment, supported by higher spending across all goods categories. Spending on smaller consumer goods, such as clothing, sporting goods and groceries, rose particularly sharply in real terms. Higher real grocery spending was partly driven by falling food prices in May, but spending also increased in nominal terms.
Nominal spending at petrol stations rose a further 2.6% m/m in May, continuing to reflect higher fuel prices. Compared to February, before the closing of the Strait of Hormuz, nominal spending at petrol stations has risen 16.9%. However, adjusted for prices, real spending fell 0.2% m/m in May and has declined 3.1% since February. This shows that households are buying less fuel, which can largely be attributed to a declining number of diesel and gasoline cars, while electric cars have consistently accounted for more than 95% of new car purchases in recent months.
Most service spending also increased in May. Spending in restaurants and bars rose especially strongly, while real spending related to travel has been more subdued due to higher energy prices. Real spending on airfares plummeted 5.2% m/m in May and was 16.3% lower than in May 2025.
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.
