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U.S. retail sales dropped more than expected in May, weighed down by a decline in motor vehicle purchases as a rush to beat potential tariff-related price hikes ebbed, but consumer spending remains supported by solid wage growth for now. The largest decline in sales in four months reported by the Commerce Department on Tuesday added to moderate job growth last month in suggesting that domestic demand was softening. That was reinforced by other data showing production at factories, outside motor vehicle assembly, decreased in May. President Donald Trump’s aggressive and often shifting tariff position has heightened economic uncertainty, making it difficult for businesses to plan ahead. Federal Reserve officials meeting on Tuesday and Wednesday are expected to leave the U.S. central bank’s benchmark overnight interest rate unchanged in the 4.25%4.50% range while monitoring the fallout from the import duties and rising tensions in the Middle East. “Tariff announcements have had a clear impact on the timing of large-ticket purchases, notably autos, but there are few signs yet that tariffs are leading to a general pullback in consumer spending,” said Michael Pearce, deputy chief economist at Oxford Economics. “We expect a more marked slowdown to take hold in the second half of the year, as tariffs begin to weigh on real disposable incomes.” Retail sales fell 0.9% last month, the largest decrease since January, after a downwardly revised 0.1% dip in April, the Commerce Department’s Census Bureau said. The second straight monthly decline unwound the bulk of the tariff-driven surge in March. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, decreasing 0.7% after a previously reported 0.1% gain in April. They increased 3.3% year-on-year in May. Sales last month were also held down by lower receipts at service stations because of cheaper gasoline as the White House’s protectionist trade policy has raised fears over global growth, restraining oil prices. But hostilities between Israel and Iran have boosted oil prices. A 25% duty on imported motor vehicles and trucks came into effect in April. Unseasonably cooler weather likely also hurt sales. Receipts at auto and parts dealerships tumbled 3.5%. Sales at building material and garden equipment and supplies dealers dropped 2.7%. Receipts at service stations fell 2.0%, while those at electronics and appliance stores slipped 0.6%. Sales at food services and drinking places, the only services component in the report, declined 0.9%. Economists view dining out as a key indicator of household finances. But online sales jumped 0.9%, while those at clothing retailers increased 0.8%. Furniture store sales soared 1.2%. Sporting goods, hobby, musical instrument and book store sales advanced 1.3%. Retail sales excluding automobiles, gasoline, building materials and food services increased 0.4% in May after an upwardly revised 0.1% fall in April. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have dropped 0.2% in April. Downside risks mounting Economists estimated that growth in consumer spending, which accounts for more than two-thirds of economic activity, was so far this quarter tracking at least a 2.0% annualized rate after slowing to a 1.2% pace in the first quarter. The Atlanta Fed is forecasting GDP rebounding at a 3.5% annualized rate in the second quarter. The anticipated surge will largely reflect a reversal in imports, which have fallen sharply as the frontloading of goods fizzled. The economy contracted at a 0.2% pace in the JanuaryMarch quarter. Downside risks to consumer spending are, however, rising. The labor market is slowing, student loan repayments have resumed for millions of Americans and household wealth has been eroded amid tariff-induced stock market volatility. Economic uncertainty could lead to precautionary saving. “The outlook for consumer spending is cloudy,” said Bill Adams, chief economist at Comerica Bank. Stocks on Wall Street fell. The dollar rose against a basket of currencies. U.S. Treasury yields fell. Economists said retailers likely offered discounts last month, adding that could explain part of the benign consumer price data in May. They, however, expected price pressures to build up in the month ahead. That thesis was supported by a separate report from the Labor Department’s Bureau of Labor Statistics showing import prices, excluding fuels and food, increased 0.4% in May after advancing 0.5% in April. In the 12 months through May, the so-called core import prices increased 1.3%. Core import prices are being driven by dollar weakness, with the greenback down about 6.2% this year on a trade-weighted basis. Trump’s aggressive trade posture has shaken investors’ confidence in the dollar, eroding the appeal of U.S. assets. “This is another sign that inflation will pick up this summer and into the fall as prices start to reflect the higher costs for goods from enacted tariffs,” said Ben Ayers, senior economist at Nationwide. A third report from the Fed showed manufacturing output edged up 0.1% in May, lifted by a 4.9% jump in motor vehicle and 1.1% rise in aerospace and miscellaneous transportation equipment production. That followed a 0.5% decline in April. But excluding motor vehicles, factory output fell 0.3% amid declines in fabricated metal products, machinery and nonmetallic mineral products. There was also a steep decrease in energy nondurable consumer goods production. Manufacturing, which accounts for 10.2% of the economy, relies heavily on imported raw materials. Trump has defended the duties as necessary to revive a long-declining U.S. industrial base, but economists say that cannot be accomplished in a short period of time, citing high production and labor costs as among the challenges. “Continued uncertainty around where trade policy will ultimately land is preventing many businesses from taking on new capital expenditures, unsure of the policy and underlying demand environment,” said Shannon Grein, an economist at Wells Fargo. “We expect manufacturing to continue to tread water in the months ahead.” Lucia Mutikani, Reuters
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Kraft Heinz announced on Tuesday their brands will no longer release new products with synthetic or artificial food dyes, and will completely phase them out of their current products by 2027. The major food conglomerate, which owns brands like Kraft, Kool-Aid, and Jell-O, said in a statement that nearly 90% of their U.S. products are already free of FD&C colors. They say their signature ketchup has never used artificial colors and has always relied solely on tomatoes for the products bright red hue. The nearly 10% of Heinz products that use some of the 36 color additives and nine petroleum-based synthetic dyes currently approved by the FDA, include drink products such as Kool-Aid and Crystal Light, and food products such as Jell-O and Jet-Puffed. Why now? Heinzs statement comes just months after the U.S. Department of Health and Human Services and Food and Drug Administration (FDA) announced plans to phase out all petroleum-based synthetic dyes by the end of 2026, and encouraged major food companies to do so voluntarily. The Trump Administration and RFK Jr.s Make America Healthy Again campaign has long advocated against artificial dyes, linking them to potential cancer risks and ADHD symptoms, like hyperactivity. Red dyes have especially been put on the chopping block, with Red No. 3 being singled out as needing to be eliminated no later than January 2027, with calls for companies to reformulate their food products. The vast majority of our products use natural or no colors, and weve been on a journey to reduce our use of FD&C colors across the remainder of our portfolio, Pedro Navio, North America President of Kraft Heinz, said in a statement. In fact, we removed artificial colors, preservatives, and flavors from our beloved Kraft Mac & Cheese back in 2016. Who else has eliminated synthetic additives? States and companies alike are suffering pushback from the current administration and consumer market to rid their products of artificial additives and theyre seemingly obliging. Companies such as Tyson, and PepsiCo owned brands like Lays and Tostitos, have already pledged to stop using synthetic and petroleum-based dyes by the end of this year. Other wide-reaching bans have come from states on both sides of the political aisle including California, Virginia, and West Virginia, with 23 other states actively pursuing bans. For consumers interested in the federal rules governing color additives and dyes in foods, cosmetics, and drugs, the U.S. Department of Health and Human Services maintains a searchable online database with up-to-date information.
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Indie streamer Mubi raised a staggering $100 million from Sequoia Capital. Then, fans started boycotting. Mubi built a loyal audience of cinephiles through breakout hits like The Substance and Decision to Leave. But after subscribers examined investor Sequoia Capitals portfolio, many took to X to denounce the streamer. They pointed to Sequoias ties to Israels military campaign in Gaza, highlighting its investments in the Israeli defense tech startup Kela. Even after Mubi issued a public statement, its social media remains flooded with Palestinian flags and posts about canceled subscriptions. Even after Mubi issued a public statement, its social media remains flooded with Palestinian flags and posts about canceled subscriptions. The crisis raises broader questions about the financial forces shaping the indie film world. Mubis money crisis Founded in 2007, Mubi coasted for a decade on a loyal base of cinephiles. Then, the distributors films began breaking out, most notably with The Substance, the $80-million-grossing body horror starring Demi Moore. Between 2016 and 2025, Mubi jumped from 100,000 to 20 million subscribers. That growth enabled the company to invest in more films. At the 2025 Cannes festival, Mubi was a top buyer, acquiring titles like The Sound of Falling and the Jennifer Lawrence-led Die My Love. Its success also helped Mubi secure significant funding. After closing a $100 million fundraising round, the company was reportedly valued at $1 billion. The round was led by Sequoia Capital, the investment firm known for backing companies like Nvidia, Reddit, and PayPal. Sequoia also led a $10 million seed round for Kela, an AI-powered defense tech firm founded by four former Israeli intelligence officials, one of whom also worked as the general manager of Palantir Israel. That connection sparked outrage among some Mubi fans. On X, users organized a boycott of the streamer after learning about its ties to Sequoia. One protest flyer claimed that Sequoia is deeply invested in Israels genocide of the Palestinian people. As posts gained traction, Mubi issued a statement on Instagram that many fans considered inadequate. The company’s social media postseven unrelated onescontinue to attract comments from upset subscribers. When reached for comment, Mubi sent Fast Company the same statement shared on its Instagram: Over the last several days, some members of our community have commented on the decision to work with Sequoia given their investment in Israeli companies and the personal opinions expressed by one of their partners. The beliefs of individual investors do not reflect the views of MUBI. How big money invaded independent filmmaking Mubi is far from alone in facing investment controversies. A24, known for films like Civil War and Moonlight, is valued at $3.5 billion. In 2024, A24 accepted $75 million from Thrive Capital, an investment firm that has also put more than $1 billion into OpenAI. Some fans were dismayed that A24, ostensibly a bastion for human-made art, would align itself with investors helping to accelerate generative video. Other independent film studios dont just take money from large firmstheyre owned by them. Annapurna Pictures, the company behind Her and Hustlers, is owned by Megan Ellison. Megan is the daughter of Larry Ellison, cofounder of Oracle, and sister of David Ellison, CEO of SkyDance. Neon, distributor of Anora, is owned by The Friedkin Group, which invests heavily in automotive companies like Toyota. Focus Features is owned by Comcast. Sony Pictures Classics belongs to Sony. IFC Films is under AMC. Some holdouts still maintain a more independent path. Blumhouse Productions focuses on low-budget, scalable horror films, which allows it to operate without major outside investment. Briarcliff Entertainment uses its lack of financial stakeholders to support riskier projects, including The Apprentice and the Jonathan Majors-led Magazine Dreams. But most independent filmmakers cannot avoid the pull of Wall Street, Big Tech, or other powerful investors entering the entertainment world. These financial ties often leave fans in an ethical bindan issue many Mubi subscribers are currently trying to navigate.
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