US retail sales slow unexpectedly in July

US retail sales slowed last month as US consumers pulled back on purchases of fashion and motor vehicles and parts.

Total retail sales volumes edged higher by 0.1% month-on-month to reach $509.03bn, according to the Department of Commerce.

Economists had forecast an increase of 0.6%.

Excluding those of motor vehicles and parts and at gasoline stations, sales dipped by 0.2% on the month.

Sales at clothing and clothing accesories stores registered the biggest drop, shrinking by 1.7% versus July, while those motor vehicles and parts dropped by 0.8%.

However, upwards revisions to readings for previous months helped to offset some of the 'miss' in Friday's report, with the estimate for total headline sales in July having been revised higher by 0.2 percentage points to 0.7%.

Commenting on the data, Ian Shepherdson at Pantheon Macroeconomics said: "The numbers are volatile in the short-term, but the y/y rate is a healthy 6.2%. Department store sales fell 1.0%, after rising 1.4% in July; the trend is about flat. Elsewhere sales rose modestly last month, even in food service, where we expected a big correction after a surge in recent months.

"Overall, we think these data are consistent with a 0.1% m/m increase in real August consumption. Allowing for a small upward revision to July, we reckon consumption is on course for a 3% third quarter gain, slowing from 3.8% in Q2."