U.S. retail sales fall as tax refund boost fades

U.S. retail sales unexpectedly declined 0.6% in July, the largest monthly drop since May 2025, reversing a revised 0.2% gain. The report attributes part of the prior strength in April and May to tax refund spending that has since faded. Excluding gas stations and auto dealers, core retail sales fell 0.2%. Gas prices rose to $4.08 per gallon from $3.85, and shoppers pulled back in consumer electronics and online retailers. The data covers store sales only and omits travel and hotel activity, while restaurant sales recorded a 0.5% increase.

Retail sales fell 0.6% in July as refund-driven spending faded