Frustrated US consumers cut their retail spending last month | CNN Business

Americans pulled back on their retail spending in July and their confidence in the economy is taking a hit. That’s a potentially troubling combination for a consumer-driven economy. Retail sales fell 0.6% in July from the prior month, the Commerce Department said Friday, down from June’s 0.2% and marking the steepest drop since May 2025. Those figures are adjusted for seasonal swings but not inflation. A separate report from the University of Michigan showed that consumer sentiment declined about 8% early this month to a preliminary reading of 51, ending a two-month streak of rising sentiment. Both reports came in worse than economists had estimated in polls by data firm FactSet, showing that the lifeblood of the US economy — consumer spending — is coming under pressure. People’s dollars account for about two-thirds of economic growth. “American consumers are showing signs of fatigue,” Heather Long, chief economist at Navy Federal Credit Union, said in commentary issued Friday. Americans keep shopping amidst depressed consumer sentiment For years, the US consumer has proven resilient through a series of economic challenges, such as the Fed’s aggressive rate-hiking c