Economy

The Census Bureau's advance estimate shows July 2026 retail and food services sales dropped 0.6% from June, the largest monthly decline since May 2025, driven primarily by a 2.2% fall in nonstore retailers and a 1.8% drop in motor vehicle sales. The nonstore decline is partly attributed to a timing shift in Amazon's Prime Day, which began in late June rather than July, pulling spending forward into the prior month. The Census Bureau notes the confidence interval for the monthly change includes zero, meaning the data do not statistically rule out no change, and the figures are not adjusted for inflation.

The University of Michigan's preliminary August 2026 consumer sentiment index fell to 51.0, down from 55.2 in July, with expectations declining more sharply than current conditions and year-ahead inflation expectations ticking up to 4.3%. Republican sentiment posted the largest month-over-month drop of any partisan group, falling to 78.7 from 88.2 in July, while only 8% of consumers expected income growth to outpace inflation, compared with 18% in December 2024. A Federal Reserve analysis cautions that weakening sentiment surveys do not reliably predict actual spending declines, and July nominal retail sales data showed a 0.6% monthly dip but a 5.0% year-over-year gain.