U.S. retail sales came in weaker than expected in May, spooking traders.

U.S. retail sales fell 0.9% in May after solid gains in April. Excluding autos, sales were down 0.4%. “The figures were weaker than expected, but not convincing enough to point to a new softening trend,” says BMO Nesbitt Burns.

CIBC World Markets says that, while May wasn’t a sunny month, it wasn’t quite as bad as it looked. “Excluding autos and gasoline, sales dipped only 0.1%, and were still up at a respectable 4.6% annualized over the last three months after a hefty 0.8% April advance.”

BMO notes that the drop in gasoline service stations was probably price-related, and that clothing sales have reportedly already bounced back in June. It says that the general merchandise category is rebounding in June, although the reluctance to travel and eat in restaurants may remain.

CIBC World Markets says that May’s retail data point to a second soft month for real consumption, given the drop in unit auto sales and the weakness in ex-auto retailing. “At this point, even with a rebound in June, we’re looking at Q2 real consumption growth running closer to 2% than our earlier 2.5% call.”

“If we get confirmation that U.S. retail sales are declining on a trend basis, the bond market will probably push yields down considerably into the summer months. It’s too soon to say that is happening now,” concludes BMO.