Americans Are Pulling Back on Spending as US Retail Sales Fell 0.6% in July: Amazon, Non-Store Retailers Hit Hardest

Key takeaways

• July retail sales slipped 0.6%, driven by a 2.2% drop in non‑store sales, signaling cautious consumer spending and potential pressure on retail and advertising sectors.
• Retail sales fell 0.6% in July
• Non‑store sales down 2.2%
• Motor vehicle sales down 1.8%

What happened

U.S. retail sales fell 0.6% in July, the largest monthly decline since May 2025, missing the 0.1% increase forecast. The drop was driven mainly by a 2.2% decline in non‑store retailers, including Amazon, and a 1.8% fall in motor vehicle and parts dealer sales. Excluding autos, sales slipped 0.3% versus a 0.2% rise expected. Control‑group sales, which omit food services, auto dealers, building materials stores and gas stations, fell 0.4%, the biggest drop since January 2025.

Why it matters

The data signals a tightening in consumer spending, a key driver of GDP growth. A sharp fall in non‑store sales, especially Amazon, indicates that online shopping is cooling after the Prime Day surge. Lower‑income consumers are tightening budgets, while higher‑income groups remain more resilient, suggesting a shift…

Short-term and longer-term

Short-term. Retail traders should watch Amazon (AMZN) and other non‑store names for potential pullback in earnings as online sales cool.

Longer-term. Investors should reassess the long‑term growth prospects of e‑commerce and automotive retail, as July’s data indicates a shift toward more budget‑conscious consumers.