U.S. shoppers reduced their purchases in July even more than anticipated as worries over the rising delta variant cases slowed economic activity and drying up government stimulus.
- Retail sales for July dropped by 1.1%, worse than the Dow Jones estimate of 0.3% and below the upwardly revised 0.7% in June.
- Gus Faucher, the chief U.S. economist at PNC, stated that the outlook for consumer spending remains optimistic even though retail sales fell in July.
- Consumers account for close to 70% of all activity in the U.S., so retail sales are observed closely as a metric to overall economic health.
- Though July recorded a month-over-month drop, the $617.7 billion in sales still accounted for a 15.8% acceleration from the same period last year.
A larger proportion of the monthly decline comes from motor vehicles and parts dealers, which dropped by 3.9%. The auto sector was a major contributor to the inflation increase in 2021, with used car prices rising higher amidst swelling demand.
DXY up +0.53%, EUR USD down -0.53%
Source: U.S. Department of Commerce