Total US retail and food services sales slipped to $763.6 billion in July, down from $768.1 billion in June, snapping a 14-month streak of monthly gains. The drop was concentrated in gas station receipts, where cheaper oil prices pulled spending lower, and in online retail, which gave back ground after Amazon's summer sales event pulled purchases forward into June. Year-over-year, sales were still up 5%, which shows the monthly dip is partly a timing and energy-price story.
A consumer spending stumble matters because household consumption drives roughly 70% of US economic output. If this weakness extends into August, it increases the odds the Federal Reserve feels less pressure to hold rates high, which could lift bond prices and weigh on the dollar. Retailers with heavy exposure to discretionary online spending face the most direct earnings pressure.
August 28: Conference Board Consumer Confidence report. September 11: August CPI inflation data release. September 17-18: Federal Reserve FOMC rate decision.
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