Retail sales in the U.S. unexpectedly declined in July, dragged down by lower sales at car dealerships, gas stations, and online merchants.
Sales dropped by 0.6 percent last month, the biggest decline since May 2025, data from the Census Bureau showed Friday. Despite the month-to-month decline, sales are up 5.2 percent in the first seven months of 2026 compared with the period a year earlier.
Economists had forecast a mild rise in sales. The lower-than-expected sales figures are less worrying than they appear, largely driven by falling prices rather than consumers pulling back from purchases. The retail sales figures are adjusted for seasonal changes but not for price changes.
Gas stations saw a 0.9 percent decline in sales. Gasoline prices fell 2.9 percent, according to the consumer price index released Wednesday.
Sales at motor vehicle and parts dealerships dropped 1.8 percent. This may be a sign that higher gas prices are weighing on consumer appetites for cars and trucks.
Grocery store sales fell 0.1 percent, a move downward that matches the drop in the consumer price index for food at home.
Online sales saw the sharpest drop, falling 2.2 percent. Analysts say this was likely tied to the timing of Amazon Prime day, which happened in June this year. So far this year, online sales are up 10.2 percent.
Sales at electronics and appliance stores fell 0.5 percent. Major appliance prices tumbled 0.8 percent in the month.
Sales were much stronger elsewhere. Sales rose at furniture stores and home improvement and garden centers. Sales at the highly discretionary category covering bars and restaurants climbed by a sharp 0.5 percent. Sales were also up at general merchandise stores, a category that includes huge retailers like Walmart, Target, and Costco. Health and personal care store sales jumped 0.7 percent.
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