U.S. retail sales fall most since May 2025 after solid demand run

U.S. retail sales fell in July by the most in more than a year as consumers pulled back on purchases at online stores and auto dealers.

The value of retail purchases, which isn’t adjusted for inflation, decreased 0.6 per cent, the most since May 2025, according to data published Friday by the Census Bureau. Excluding autos and gasoline, sales fell 0.2 per cent.

The report suggests consumers took a breather last month after a stronger first half of 2026, though some analysts also warned the numbers could be affected by spending pulled forward after Amazon.com Inc. moved its Prime Day sales event to June this year from July the year before.

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Five of 13 categories in the report posted declines, led by a 2.2 per cent drop in sales at nonstore retailers such as Amazon. Sales at motor vehicles and parts dealers fell 1.8 per cent. Meanwhile receipts at restaurants and bars, the only service-sector category in the retail report, rose 0.5 per cent.

Friday’s data “leave the consumer looking a little less healthy,” Stephen Brown, the chief North America economist at Capital Economics, said in a note. “Nonetheless, the miss in July was mainly due to a sharp fall in non-store sales which likely reflects the different timing of Amazon Prime Day this year, rather than a fundamental downshift in consumer spending growth.”

So-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — fell 0.4 per cent, the most since the start of 2025. The measure excludes food services, auto dealers, building materials stores and gas stations.

Economists generally remain wary about the outlook for spending after outsize tax refunds delivered a one-time bump earlier in 2026 and the personal saving rate slid in June to a four-year low.