Overview
- The Commerce Department’s advance estimate released on Friday showed retail and food services sales fell 0.6% month‑over‑month to $763.6 billion in July.
- A key control measure that strips out autos, gasoline and building materials fell about 0.4%, with steep declines in e‑commerce, motor vehicle dealers and gasoline stations while restaurants and clothing posted gains.
- Sales were still roughly 5.0% higher than a year earlier, but the Census report is nominal and the month‑over‑month drop likely means fewer real (inflation‑adjusted) purchases.
- Economists say the pullback reflects fading 2026 tax‑refund boosts, Amazon’s Prime Day shifting into June and volatile gasoline prices, each of which pulled spending forward or reduced July receipts.
- The weak retail read, together with a surprise July payroll loss and mild inflation, has led many forecasters to trim Q3 growth forecasts and lower the probability of a Fed rate increase in September while noting stock‑market wealth and a tight labor market could limit a deeper slump.