WASHINGTON, June 18 Reuters U.S. retail sales increased less than expected in May as lower prices for gasoline weighed on receipts at service stations.

Retail sales rose 0.1 last month after a downwardly revised 0.2 drop in April, the Commerce Department39;s Census Bureau said on Tuesday. Retail sales were previously reported to have been unchanged in April.

Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, gaining 0.3 in May. Retail sales have in recent months been distorted by an early Easter.

Nonetheless, the trend in sales growth has been slowing as higher prices and interest rates force households to prioritize essentials and cut back on discretionary spending.

Banks are also tightening access to credit as lower income borrowers increasingly struggle to keep up with their loan payments. Though the labor market remains on a solid footing, it is becoming a bit difficult for people who lose their jobs to quickly find new work and wage increases are moderating.

Savings have also been whittled down. Still, the pace of spending is likely sufficient to sustain the economic expansion.

The Federal Reserve last week kept its benchmark overnight interest rate in the current 5.255.50 range, where it has been since last July. U.S. central bank officials pushed out the start of rate cuts to perhaps as late as December, with policymakers projecting only a single quarterpercentagepoint reduction for this year….