Retail sales in July fell 1.1% from the previous month, driven largely by heavy slumps in motor vehicle dealer sales.
The Commerce Department reported motor vehicle and parts dealers’ sales fell 3.9% from the previous month. Yet dealers alone were hit harder – auto and other motor vehicle dealers saw sales fall 4.3% from June. RV dealers’ sales are captured by the Commerce Department in the auto and other motor vehicle dealers category.
Overall, the 1.1% drop in retail sales was nearly four times the Dow Jones analyst estimate of a 0.3% decline.
“Although retail sales fell in July, the outlook for consumer spending remains positive,” said Gus Faucher, chief U.S. economist at PNC. “However, spending growth will shift from goods to services over the next couple of years, limiting growth in most categories of retail sales.”
Gasoline sales increased 2.4%, and the return of businesses to bars and restaurants pushed food and beverage sales up 1.7%. Eating and drinking establishments saw a 38.4% increase in sales from a year ago.