Shoppers spent at a healthy pace in July, particularly at the nation’s auto dealerships, as they appeared to shrug off President Donald Trump’s tariffs.
Retail sales rose a solid 0.5% last month, and June spending was stronger than expected, according to the Commerce Department’s report released Friday. June’s retail sales were revised upward to 0.9%, from a 0.6% increase, the agency said. The pace in July matched economists’ estimates.
The increases followed two consecutive months of spending declines—a 0.1% pullback in April and a 0.9% slowdown in May.
Excluding auto sales, which have been volatile since Trump imposed tariffs on many foreign-made cars, retail sales rose 0.3% in July.
Auto sales rose 1.6%. They appear to have returned roughly to normalized spending after a surge in March and April as Americans attempted to get ahead of Trump’s 25% duty on imported cars and parts, according to Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
The data shows solid spending across many retail sectors. Business at clothing stores was up 0.7%, while online retailers saw a 0.8% increase. Business at home furnishings and furniture stores rose 1.4%.
However, at electronics stores, sales were down 0.6%. And business at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, fell 0.4%.
