WASHINGTON (MarketWatch) — Sales at U.S. retailers decreased 0.2% in May to a seasonally adjusted $387.1 billion, the Commerce Department estimated Tuesday, suggesting that the soft patch might not be severe.

This is the first decline in sales since last June. But details of the report were not all weak. While auto sales were down as expected, there was some strength in building materials and miscellaneous stores. See full report.

Economists breathed a sigh of relief that consumers have not stopped spending as some had feared.

“So the consumer rollover has not happened; businesses will have to cheer up,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Not all analysts were celebrating. Josh Shapiro, chief U.S. economist at MFR Inc. said weak spending is a cause for concern.

“With higher gas prices eating into the income available for discretionary spending, the consumer faces stiff headwinds. This underscores how absolutely key it is that the labor market continue to improve,” Shapiro wrote in a note to clients.

A drop in sales in May was expected, based on earlier reports from auto makers. But the decline was not as bad as forecast. Ahead of the report, economists surveyed by MarketWatch expected sales to fall 0.7%. See MarketWatch calendar with economic forecasts.

Stocks DJIA, +1.19% were higher as retail sales were better than expected. Best Buy Co. BBY, +1.09% also beat quarterly estimates.

Treasury prices TMUBMUSD10Y, 0.681% fell further on Tuesday on the stronger-than-expected sales, pushing yields up to the highest level in almost two weeks,

In a separate report, the Labor Department said the producer price index rose 0.1% in May, while the core rate, excluding food and energy prices, rose 0.2%. Read ‘Wholesale prices rose at slower pace in May.’

Compared with May 2010, sales are up 7.7%.

Sales rose an downwardly revised 0.3% in April, compared with a 0.5% increase originally reported.

The sales are seasonally adjusted, but they aren’t adjusted for price changes.

Excluding a 2.9% decline in motor vehicles sales, retails sales for the month rose 0.3%, stronger than the flat reading expected.

Investors eye inflation

Sales at gasoline states rose 0.3% despite slightly lower pump prices. Excluding gasoline, sales fell 0.3%.

Excluding autos and gasoline, sales rose 0.3% in May.

So-called “core” retail sales, which exclude cars, gasoline, and building materials, rose 0.2% in May, the slowest gain this year.

Retail sales account for about half of total consumer spending and about a third of final sales in the U.S. economy.

At the moment, inflation-adjusted consumer spending for the second quarter is running at a slower pace than the 2.2 % rate recorded in the first three months of the year. This was down sharply from a 4.1% rate in the fourth quarter.

Details

Motor vehicle sales fell 2.9% in May after falling 0.7% in April. This was the largest decline since February 2010.

Furniture store sales fell 0.7%. Sales at electronics and appliances stores fell 1.3%.

Building materials and hardware store sales increased 1.2% after rising 0.5% in April.

Sales at the nation’s malls were lower in May. Sales at general merchandise stores fell 0.1%, including a 0.7% decrease at department stores. Sales at clothing stores rose 0.2%.

Sales at stores catering to leisure-time pursuits, such as hobbies, sports and reading, fell 0.4%.

Sales at health and personal-care stores rose 0.8%.

Sales at food and beverage stores fell 0.5%. Sales at restaurants and bars rose 0.6%.

Sales at non-store outlets, such as catalogs and online stores, rose 1.2%.