US retail sales weakest in over a year in July

US retail sales tumbled unexpectedly in July, reaching their weakest level in over a year, according to government estimates released on Friday. Total sales reached US$763.6 billion, a decline of 0.6% compared to the previous month. Excluding auto dealers and gasoline stations, sales dropped by 0.2% on a month-on-month basis, falling short of the 0.1% increase analysts had anticipated.

The decline in retail sales highlights the challenges faced by consumers grappling with inflation while utilizing their savings. Inflation has remained elevated in recent months, driven by gasoline prices and geopolitical tensions, leading to surging costs at US gasoline stations. However, gasoline prices have cooled in July, contributing to a decline in sales at the pump, although prices remain higher than before the Middle East conflict began.

Motor vehicle and parts dealers experienced a 1.8% month-on-month decline, while electronics stores saw a 0.5% decrease. Retail sales at gasoline stations dropped by 0.9%, and online stores suffered the most significant setback with a 2% decline. Despite the weak performance, US retail sales still remained 5% higher than the same period a year earlier.