US July retail sales miss forecasts by wide margin
Americans closed their purse strings unexpectedly last month, especially when it came to purchases of cars and trucks.
According to the Department of Commerce, in seasonally adjusted terms, US retail sales volumes dropped at a month-on-month pace of 1.1% in July to reach $617.7bn.
That was well below the 0.2% dip that most forecasters had penciled-in and only slightly offset by a one tenth of a percentage point upwards revision to June's print to 0.7%.
Sales of motor vehicles and parts suffered by far the biggest fall, declining by 3.9% in comparison to the month before.
Clothing stores saw sales fall by 2.6% and non-store retailers by 3.1% alongside.
Gasoline stations on the other hand saw sales rise by 2.4% on the month, miscellaneous store retailers by 3.5% and food services and drinking places by 1.7%.
Commenting on the latest retail sales numbers, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the seven tenths of a percentage point upwards revision to non-auto sales meant the headline miss versus consensus overstated the gloom.
Nevertheless, the impact of the Delta variant, while impossible to separate from that from fading stimulus, was clear.
"The Delta hit likely will be bigger in August, so we have to scale back our hopes for Q3 consumption quite sharply; we’re now looking for a 3% annualized increase, down from our pre-Delta 6% forecast.
"A Q4 rebound is a decent bet, though, assuming the Delta surge is over by then. Note that cases are now falling in Missouri and Arkansas, the states hit first by the Delta wave, in late June."