US retail sales fell 0.6% in July, dragged down by autos and online
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Americans spent $763.6 billion at stores and restaurants in July 2026, and for the first time in months, that was less than the month before. Retail and food services sales fell 0.6 percent from June, the Census Bureau reported, a drop big enough to clear the survey's margin of error.
Autos and online did the damage
The two biggest drops were car dealers and online sellers. Motor vehicle and parts dealers fell 1.8 percent on the month, and nonstore retailers, the category that's mostly e-commerce, dropped 2.2 percent.
Strip autos out and the decline shrinks to 0.3 percent. Strip out autos and gas stations both, the measure economists watch as the steadiest read on underlying demand, and sales fell just 0.2 percent, which is close enough to flat to call it flat.
| Category | vs June | vs July 2025 |
|---|---|---|
| Clothing & accessories | +1.9% | +5.0% |
| Health & personal care | +0.7% | +1.1% |
| Food services & bars | +0.5% | +5.0% |
| General merchandise | +0.3% | +3.7% |
| Building materials & garden | +0.3% | +6.7% |
| Grocery stores | –0.1% | +0.8% |
| Gas stations | –0.9% | +16.2% |
| Motor vehicle & parts | –1.8% | +1.9% |
| Nonstore (online) | –2.2% | +7.7% |
On the flip side, plenty of categories rose. Clothing stores jumped 1.9 percent, restaurants and bars added 0.5 percent, and health, general merchandise, and building supplies all were slightly up.
The year-over-year picture is still solid, on paper
Zoom out and spending is up 5.0 percent from July 2025, and up 6.3 percent over the last three months compared with the same three months in 2025. Those are healthy numbers, with one caveat: these figures are not adjusted for inflation. They're dollars spent, not stuff bought.
Gasoline station receipts were up 16.2 percent from a year ago, which sounds like a boom until you remember gas sales are measuring the price at the pump, and gas prices have been high after the Iran conflict. Back out inflation and the real growth in what Americans actually bought is a good deal thinner.
It fits the run of cooling signals the Bureau's other indicators have been sending: construction spending is falling, factory orders slipped again, and home-building permits point to a slowdown. A retail report that's flat once you remove the noisy parts sits comfortably alongside all of it.
What this number is
This is the advance estimate, the earliest and roughest cut. It's built from a subsample of about 4,800 firms standing in for more than three million retail and food businesses, so it gets revised as fuller data arrives.
For whether households can keep it up, see our look at whether middle-class incomes are actually rising.
Sources
All figures are from the U.S. Census Bureau's Advance Monthly Sales for Retail and Food Services report for July 2026 (Release CB26-131, August 14, 2026), including the seasonally adjusted category detail in Tables 1 and 2. Sales are adjusted for seasonal, holiday, and trading-day differences but not for price changes. The advance estimate draws on a subsample of about 4,800 firms and is subject to revision.
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How much did US retail sales change in July 2026?
Retail and food services sales fell 0.6 percent from June to $763.6 billion, according to the Census Bureau's advance estimate. The drop was large enough to exceed the survey's margin of error, so it counts as a real decline. Compared with July 2025, sales were still up 5.0 percent, though that figure is not adjusted for inflation.
Why did retail sales fall in July?
The decline was concentrated in two volatile categories. Motor vehicle and parts dealers fell 1.8 percent and nonstore retailers, mostly e-commerce, dropped 2.2 percent. Excluding autos, the decline shrinks to 0.3 percent, and excluding both autos and gas stations it was just 0.2 percent, close to flat. Clothing, restaurants, and general merchandise all rose.
Are retail sales adjusted for inflation?
No. The Census Bureau adjusts these figures for seasonal, holiday, and trading-day differences, but not for price changes. So the 5 percent year-over-year gain reflects dollars spent, not the quantity of goods bought. Gasoline station sales, for example, rose 16 percent from a year ago largely because of higher pump prices, not more driving.
