NEW YORK WHOLESALE

But even after excluding volatile gasoline sales, consumers barely increased their spending.

The Commerce Department said Wednesday that retail sales dipped 0.2% in May. That followed a revised 0.2% decline April. The back-to-back declines were the first in two years.

The weakness reflected a 2.2% plunge in gasoline station sales. Still, excluding gas station sales, retail spending rose just 0.1% in May. And it dropped 0.1% in April. That left retail spending roughly flat outside of gas sales for the two months, a sign that slower job growth and paltry wage increases may be leading consumers to pull back on spending.

Another report said companies increased their stockpiles at a faster rate in April, despite modest growth in sales.

The Commerce Department says business stockpiles grew 0.4% in April, slightly better than March's pace. When businesses step up restocking, that generally leads to increased factory production and higher economic growth.

Total inventories rose to $1.58 trillion in April, 19.7% higher than the low in September 2009, when businesses were slashing inventories in response to the deep recession.

A third report Wednesday said cheaper gas pushed down the government's measure of wholesale prices by 1% in May, biggest drop in nearly 3 years.

The steep drop in gasoline costs drove down a measure of wholesale prices in May by the most since July 2009. But outside the food and energy categories, prices increased moderately.

The Labor Department says that the producer price index fell 1% in May, after dropping 0.2% in April. Gasoline prices dropped nearly 9%, the most in almost three years. Food costs also fell.

The index measures price changes before they reach the consumer. Excluding food and energy, the so-called "core" index increased 0.2%, the same as in April.

In the past 12 months, wholesale prices are up only 0.7%, the smallest gain since October 2009. The core index has risen 2.7% in the same period. That's the same pace as last month.

The retail sales report said Americans did spend more in May on big purchases. Sales of cars, furniture and appliances all increased.

And lower gas prices could give consumers more to spend in coming months on restaurant meals, clothes, appliances and other discretionary purchases that drive growth.

Gas prices have tumbled since peaking April 6. On Tuesday, the average nationally price for a gallon of gas averaged $3.54, according to AAA. That's down 19 cents from a month earlier.

Total retail sales fell in April to $404.6 billion. That's slightly below March's record level of $406.2 billion and 21.6% higher than the recession low hit in March 2009.

The retail sales report is the government's first look at consumer spending, which drives 70% of economic activity.

But economists are worried that consumer spending may weaken if income growth does not revive.

Workers' average hourly earnings have risen just 1.7% in the 12 months ended in May. That's well below the pace of inflation during this period.

And job growth has slowed since the start of the year. Employers added 226,000 jobs on average during the first three months of the year; they have added an average of 73,000 jobs a month since April.

If job growth does not revive, that could act as a drag on consumer spending in coming months.

In the January-March quarter, overall economic growth slowed to an annual rate of 1.9%, down from a 3% rate of increase in the October-December period.

The strength in the first three months of this year was led by the fastest growth in consumer spending in more than a year.