Overview

• U.S. retail sales rose 0.5% in July, with nine of 13 major categories gaining ground, driven by a 1.6% surge in motor-vehicle purchases ahead of EV tax-credit deadlines.
• The University of Michigan’s preliminary Consumer Sentiment Index fell to 58.6 in early August, its first decline in four months.
• Consumers’ one-year inflation expectations jumped to 4.9% as newly enacted tariffs and elevated services costs stoked price concerns.
• Underlying consumer inflation accelerated in July, led by higher services costs such as airfares, even as goods-price increases remained modest.
• Economists caution that strong nominal sales alongside weakening sentiment and signs of a softer job market heighten downside risks to consumption