Spending at U.S. retailers fell sharply in July, amid cooling auto purchases and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose.
Retail sales—a measure of purchases at stores, at restaurants and online—fell 1.1% last month compared with June, the Commerce Department reported Tuesday. Excluding autos—a category where supply-chain issues have limited available inventory—sales were down 0.4%.
Sales dropped across categories, primarily autos, but also clothing, sporting goods and furniture.
Restaurants and bars were a bright spot, with sales rising 1.7% over the month.
Retail sales rose briskly earlier in the summer as shoppers directed spending toward services, such as dining out and traveling, and away from goods. That shift occurred as more Americans became vaccinated and state and local governments eliminated many Covid-19-related restrictions, some of which have now been reimposed with the recent rise in coronavirus cases.
