U.S. Retail Sales Post Biggest Drop In More Than a Year
By CU Today Staff —
NEW YORK— Americans unexpectedly pulled back on spending in July following a splurge around the World Cup and Amazon Prime Day, with retail sales posting their biggest decline in more than a year, according to Commerce Department data released Friday.
Retail sales fell 0.6% in July, the steepest drop since May 2025, after a revised 0.2% increase in June. The decline raised concerns about the strength of consumers, who have helped sustain the U.S. economy despite persistent inflation and higher gasoline prices. The report follows unexpectedly weak employment data released last week, adding to signs the economy may be slowing after strong consumer and business spending during the first half of the year, the Associated Press noted.
Consumers continue to face prices that have risen faster than wages, while some may have exhausted tax refunds that helped support spending earlier this year. Americans also are carrying more than $1 trillion in credit card debt, up 60% from five years ago, while higher interest rates have made balances more expensive to carry and contributed to rising delinquencies, AP noted.
Gas station sales fell 0.9% in July, when fuel prices remained relatively low until late in the month. Prices have since climbed amid tensions involving the U.S. and Iran in the Strait of Hormuz, with the national average reaching $4.08 a gallon, up from $3.85 a month earlier and 92 cents from a year ago, according to AAA. While most economists still expect solid economic growth in the July-September quarter, AP reported many have lowered their forecasts following the weaker retail sales data.
Originally reported by CU Today.