NEW YORK (AP) — After splurging on the World Cup and Amazon Prime Day sales, Americans unexpectedly cut their spending in July by the biggest amount in more than a year.Retail sales fell 0.6% last month, marking the biggest decrease since May 2025, compared with a revised gain of 0.2% in June, according to the Commerce Department data released Friday.The drop in spending raised concern among some economists about the resiliency of consumers who have powered the economy forward despite nagging inflation and soaring gasoline prices. Yet it may be too early to declare a retreat by one of the strongest and most consistent forces in the U.S. economy of late. Still, the weak sales report follows unexpectedly sluggish jobs figures last week, and both suggest the economy could be slowing after strong consumer and business spending in the first half of the year.
Consumers are grappling with persistent inflation that has pushed up prices faster than wages and they may have already exhausted generous tax refunds that helped offset rising costs. There was also a notable bump in spending in both April and May as Americans dipped into their generous government tax refunds. While most economists still expect solid growth in the July-September quarter, many have lowered their forecasts in the wake of the retail sales report.
