Source: Bloomberg

Excluding gas and autos, retail sales were up 0.5% in April and 0.3% in May. That’s an annual rate of 4.9%, healthy by any standard (and a 3.2% real rate of growth).

Auto sales had been propped up by subprime lending to auto buyers, and credit problems appear to have had an effect. A tell-tale sign is the decline in used vehicle prices. That indicates forced sales by car buyers who can’t make loan payments. With used car prices falling, it’s harder to sell new vehicles.