Overview

• U.S. retail sales rose 0.5% in July after a revised 0.9% increase in June, marking back-to-back monthly gains for the first time since spring.
• Motor vehicles led the advance with a 1.6% jump at auto dealerships as buyers sped to claim expiring federal electric-vehicle tax credits.
• Non-store retailers saw sales climb 0.8% in July even as spending at restaurants and bars fell 0.4%, highlighting a shift toward goods and online deals.
• The University of Michigan’s Consumer Sentiment Index dropped to 58.6 in early August and one-year inflation expectations rose to 4.9%, reflecting renewed price concerns.
• Rising import prices and accelerating services inflation combined with signs of a softer labor market to cloud prospects for a sizable near-term Federal Reserve rate cut.