US retail sales unexpectedly fall in July
They drop 0.6% last month after an unrevised 0.2% gain in June
US retail sales unexpectedly declined by 0.6% in July, following a revised 0.2% increase in June, according to the Commerce Department's Census Bureau. Economists polled by Reuters had predicted a 0.1% rise in retail sales. The decline was attributed to the exhaustion of generous tax refunds, higher petrol prices due to Middle East tensions, and the cancellation of Amazon's Prime Day event.
Despite a 14% rise in the S&P 500 index, economists believed that retail sales weakness would be temporary. However, a PNC Financial analysis of bank data suggested that households were becoming more sensitive to rising petrol prices in July compared to earlier in the year, creating an unfavorable environment for spending in the second half of the year.
Core retail sales, which exclude automobiles, petrol, building materials, and food services, dropped 0.4% in July after a downward revision from the previous 0.4% increase.
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