Separately, retail sales rose 0.5% MoM versus the 0.6% consensus forecasts, but June’s growth rate was revised up to 0.9% from 0.6% initially reported. The details show autos rose 1.6% with furniture sales up 1.4% and non-store retail (boosted by Amazon Prime Day sales) up 0.8% with clothing up 0.7%. Electronics sales fell for a third consecutive month though (this time by 0.6%), building materials were down 1%, miscellaneous dropped 1.7% and eating, drinking out fell 0.4%. So it is a very mixed performance among the sectors.
Retail sales accounts for just over 40% of total consumer spending and here there has been an overall cooling, which is in line with weaker consumer sentiment readings. Concern about tariff-induced price hikes and worries about the prospect for the jobs market do appear to be causing a slowing in spending growth, but there is little sign of any recession threat right now.