U.S. Retail Sales Disappoint in July Following Five Straight M/M Gains
Summary
- Total retail sales -0.6% (+5.0% y/y) in July vs. +0.2% (+6.8% y/y) in June.
- Ex-auto sales -0.3% (+5.8% y/y), second successive m/m decline; auto sales -1.8% (+1.9% y/y), first drop since Apr.
- Ex-gas sales -0.6% (+4.2% y/y) and ex-auto & gas sales -0.2% (+4.8% y/y); both up m/m from Jan. to June.
- Retail control group -0.4% (+4.6% y/y) after six consecutive m/m increases.
- Declines m/m: nonstore sales (-2.2%), gasoline stations (-0.9%), electronics stores (-0.5%).
- Gains m/m: clothing stores (+1.9%), health & personal care stores (+0.7%), misc. stores (+0.5%), restaurants (+0.5%).
Total retail sales unexpectedly fell 0.6% m/m to $763.6 billion in July after increases of 0.2% in June (unrevised) and 0.9% in May (+1.0% previously), data from the U.S. Census Bureau showed, pointing to a soft start to Q3 2026. A 0.2% m/m July increase had been expected in the Action Economics Forecast Survey. The decline interrupted a streak of five straight m/m gains dating back to February. The year-on-year growth rate decelerated to 5.0% in July, the lowest since March, from 6.8% in June (4.1% in July 2025); it remained far below a high of 17.1% in February 2022 and a record-high 51.8% in April 2021.
Excluding motor vehicles & parts, retail sales unexpectedly decreased 0.3% (+5.8% y/y) in July following a 0.2% decline in June and five consecutive m/m gains. A 0.2% m/m July increase had been expected. Sales of motor vehicles & parts fell 1.8% (+1.9% y/y), the first m/m fall since April, reversing a 2.4% June rise; this compared to a 1.0% decline (-1.3% y/y) in unit light vehicle sales after a 2.6% June advance.
Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, fell 0.4% (+4.6% y/y) in July after a 0.4% increase in June, snapping a string of gains since January. These sales are used in the construction of personal consumption expenditures in NIPA accounts. Nonauto sales excluding gasoline & building materials slid 0.3% (+4.7% y/y), the first m/m slide since December, following a 0.4% June increase.
Sales by category showed mixed performance in July. To the downside, nonstore retail sales decreased 2.2% (+7.7% y/y) in July, the biggest m/m decline among major categories, after a 0.9% rise in June and a streak of gains dating back to January. Gasoline station sales fell 0.9% (+16.2% y/y) following a 5.8% June drop and four consecutive m/m increases. Electronics & appliance store sales, down for the second time in three months, declined 0.5% (+4.7% y/y) in July after holding steady in June. Meanwhile, sporting goods, hobby, book & music store sales were virtually unchanged m/m (+10.1% y/y) after five straight m/m rises.
To the upside, clothing & accessory store sales rebounded 1.9% (5.0% y/y) in July following a 0.7% June decline. Miscellaneous store sales grew 0.5% (10.7% y/y), the smallest of three successive m/m increases, after a 2.1% June gain. Building materials & garden equipment store sales climbed 0.3% (6.7% y/y), the ninth straight m/m rise, on top of a 1.2% June increase. Furniture & home furnishing store sales grew 0.3% (-1.2% y/y) after a 0.1% June easing. General merchandise store sales rose 0.3% (3.7% y/y) in July after a 0.2% increase in June; within this category, department store sales edged up 0.1% (2.5% y/y) following a flat June reading.
In the nondiscretionary sales categories, health & personal care store sales recovered 0.7% (1.1% y/y) in July, up for the second time in three months, after a 0.4% decline in June. Food & beverage store sales were essentially unchanged m/m (+0.9% y/y) following a 0.1% June dip and three consecutive m/m rises.
Consumers appeared to dine out more frequently in July despite still-high inflation (July CPI +0.1% m/m, +3.4% y/y; core CPI +0.2% m/m, +2.5% y/y). Restaurant & drinking place sales rose 0.5% (5.0% y/y) in July, the fifth m/m gain in six months, after an upwardly revised 0.4% increase in June (+0.1% initially).
Retail Sales data can be found in Haver's USECON database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.