US Retail Sales Fall 0.6% in July, First Drop in 9 Months

U.S. retail sales fell 0.6 percent in July, marking the first decline in nine months and the largest drop in over a year, according to Commerce Department data released on Friday. The unexpected decrease, which missed economists' forecasts for a slight increase, suggests a slowdown in consumer spending as the boost from generous tax refunds fades and households grapple with persistent inflation and higher energy costs.

The decline was broad-based, with significant drops in several key categories. Sales at nonstore retailers, which include online shopping, fell 2.2 percent, a pullback economists attributed to Amazon moving its Prime Day sales event from July to June this year, with other retailers offering competing promotions in the earlier month. Receipts at motor vehicle and parts dealers tumbled 1.8 percent, while sales at electronics and appliance stores fell 0.5 percent. Service station sales also declined 0.9 percent, reflecting a retreat in gasoline prices from their peak earlier in the year.

However, there were some pockets of strength. Sales at clothing stores rebounded 1.9 percent, likely supported by back-to-school shopping. Receipts at food services and drinking...