July retail sales rise slightly less than expected, core sales in line

[Young woman checking reading her phone in the supermarket]
Smile

U.S. retail sales increased 0.5% M/M to $726.3B in July, falling short of the +0.6% consensus and slowing from the +0.9% rate in June (revised from +0.6%), according to data released by the U.S. Census Bureau on Friday.

Year over year, retail sales growth slowed to 3.92% from +4.35% prior (revised from +3.9%). Total sales for January through July 2025 rose 3.8% to $4.95T.

Core retail sales (excluding motor vehicles and parts) grew 0.3% M/M, matching the consensus, and decelerating from the 0.8% jump in June, which was revised up from 0.5%.

Retail sales, excluding autos and gas, rose 0.2% M/M vs. +0.8% prior (revised from +0.6%).

"Retail sales growth slowed a bit in July, perhaps illustrating that the tariff pull-forward effect is waning," said Bankrate Senior Industry Analyst Ted Rossman. "It's notable that consumers pulled back on bar and restaurant spending, which fell 0.4% on a month-over-month basis. Sales at home improvement, electronics and appliance retailers also fell month-over-month. Overall, we saw modest month-over-month and year-over-year sales growth, in line with expectations."

Retail trade sales increased 0.7% from the previous month and 3.7% from a year ago. Nonstore retailers' sales grew 8.0% from last year, while food service and drinking places climbed 5.6% Y/Y, the Census Bureau said. [https://www.census.gov/retail/marts/www/marts_current.pdf]

From a year ago, the strongest growth was in "miscellaneous store retailers," up 10.6%. Other robust increases were notched in health & personal care stores (+5.6%), furniture & home furnishing stores (+5.1%), and clothing & clothing accessory stories (+5.0%).

The weakest activity was registered at gasoline stations (-2.9%), building material, gardening equipment & supplies dealers (-2.6%), and electronics & appliance stores (-2.3%).

MORE ON THE US ECONOMY

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