Data: Census Bureau ; Chart: Neil Irwin/Axios American consumers have powered the economy forward this year. In July, they took a breather. Why it matters: While the underlying trend in consumer demand appears solid, retail sales hit an air pocket last month, suggesting a bumpier path ahead for overall growth. - Combined with a weak jobs report last week and two subdued inflation readings this week, it points to the Federal Reserve having room to be patient on potential interest rate increases this fall. Driving the news: Retail sales fell 0.6% in July, the weakest performance in more than a year and well below the 0.1% gain analysts expected. - Excluding gas stations and auto dealers, there was still a 0.3% decline in sales, meaning…
How did the retail sales control group perform in July compared to forecasts?
The retail sales control group, which feeds directly into GDP calculations, fell 0.4% in July, which was lower than the 0.3% gain that analysts had forecast. Additionally, previously reported gains for May and June were revised downward.
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What was the impact of Personal Consumption Expenditures on GDP growth in the second quarter?
Growth in Personal Consumption Expenditures contributed 2.1 percentage points to overall GDP growth in the second quarter, even as other sectors combined to subtract from GDP.
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How did the timing of the World Cup affect the retail sales data for July?
Because most World Cup games took place in June, the associated spending likely pushed retail sales upward in early summer, which created a mechanical effect that could result in a misleading decline in July.
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What factors contributed to the 2.2% drop in online sales during the period?
The drop in online sales was partly explained by Amazon holding its Prime Day discounting event earlier in the year than it did the previous year.
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