U.S. Retail Sales Unexpectedly Decrease For First Time In Nine Months

(RTTNews) - A report released by the Commerce Department on Friday showed an unexpected decline in retail sales in the U.S. in the month of July.

The Commerce Department said retail sales fell by 0.6 percent in July after rising by 0.2 percent in June. Economists had expected retail sales to inch up by 0.1 percent.

The unexpected decrease in retail sales marked the first drop since retail sales dipped by 0.2 percent in October 2025.

"The weaker July retail sales report shows that consumers took a breather last month after an ebullient burst of spending in the first half of the year," said Nationwide Chief Economist Kathy Bostjancic.

The decline in retail sales partly reflected a significant pullback in sales by motor vehicle and parts dealers, which tumbled by 1.8 percent in July after surging by 2.4 percent in June.

However, excluding the slump in auto sales, retail sales still dipped by 0.3 percent in July after slipping by 0.2 percent in June. Ex-auto sales were expected to increase by 0.2 percent.

The report also showed an extended pullback in sales by gas stations, which slid by 0.9 percent in July after plummeting by 5.8 percent in June amid lower gasoline prices.

Sales by non-store retailers also plunged by 2.2 percent, while sales by clothing and accessories stores shot up by 1.9 percent.

The Commerce Department said core retail sales, which exclude automobiles, gasoline, building materials and food services, fell by 0.4 percent in July after climbing by 0.4 percent in June.

"The contraction in core retail control spending last month, following downward revisions to the prior two months, translates into a bit less momentum for real consumer spending starting Q3 than previously expected," said Bostjancic.