MNI DATA IMPACT: US July Retail Sales Slows More than Expected

U.S. retail sales grew by 1.2% in July, slowing dramatically after two months of record-shattering gains, according to figures published Friday by the Commerce Department. Financial markets had expected sales to rise 2.0% following an upward revised 8.4% increase in June.

Motor vehicle sales fell by 1.2% last month after a 9.1% increase in June, though sales were still up 6.1% from a year earlier. Excluding motor vehicles, retail sales were up 1.9%.

Gas station sales offset some of the weakness in auto sales, increasing 6.2% in July following a revised 14.8% gain in June that was the largest single-month rise on record. Excluding gasoline sales, retail sales were up 0.9%.

Excluding motor vehicle, building materials and gas station sales, the so-called "control group" sales were up 1.4%.

CATEGORIES DIVERGED

Electronics and appliance store sales posted the strongest gain in July, rising 22.9%, though still down 3.7% year-over-year.

Other notable sales increases came from miscellaneous store retailers (+6.2%), clothing and clothing accessory stores (+5.7%), and food services and drinking paces (+5.0%). Sales in all categories slowed markedly from May and June.

Grocery store sales partially recovered in July, increasing by 0.4% after falling by 1.7% in June for the first time since April. Other losses came from building material and garden equipment, which fell by 2.9%, sporting goods stores, which fell by 5.0% and general merchandise stores, which fell by 0.2%.