July retail sales fell 0.6 per cent and the dollar hit a May low
US retail and food sales fell 0.6 per cent in July, the dollar slipped to its lowest since May, and preliminary consumer sentiment came in at 51.0.
Economics & Markets··Night
A 0.6 per cent retail pullback in July
According to the Census Bureau advance estimate dated 14 August, retail and food services sales came to $763.6 billion in July. The total was 0.6 per cent lower than in June and 5.0 per cent higher than a year earlier. Sales over the May-July period were 6.3 per cent above the same three months of 2025. The Census Bureau notes that the advance estimate rests on a subset of survey responses and can be revised in either direction; the monthly change carries a margin of error of 0.4 points. The monthly drop slows the near-term pace of spending even while the annual gain holds. The print is read with the same day's currency and confidence readings: softer consumption feeds into market pricing and household expectations. That the advance figure can still be revised does not erase the direction; a 0.6 per cent decline registers as a pullback stronger than expected and feeds rates and currency pricing.[1]
The dollar hits a May low as rate-rise odds thin
According to Bloomberg, the dollar fell to its lowest level since May after an unexpectedly weak retail sales reading, and traders pared what they were pricing for a Federal Reserve rate rise this year. Reuters reported that the dollar index fell 0.33 per cent to 99.59, the euro rose to $1.1568 and the yen gained 0.32 per cent to 158.97. Economists had expected retail sales to rise 0.1 per cent; after the release the odds of a September rate rise fell to 31 per cent. Juan Perez of Monex USA said the signs of poor consumption were clear. The currency move turns a spending print into a rates story: soft retail thins the chance of tighter policy and strengthens pricing against the dollar. Gains in the euro and the yen go beyond a single cross-rate; the index at 99.59 confirms the weakest dollar level since May and pins September pricing near 31 per cent.[2], [1]
Sentiment at 51.0 with inflation expectations at 4.3 per cent
The August preliminary University of Michigan Surveys of Consumers reading put the sentiment index at 51.0, with current conditions at 51.8 and expectations at 50.6. Year-ahead inflation expectations rose to 4.3 per cent from 4.2 per cent in July, and the long-run figure was 3.3 per cent. The preliminary reading rests on interviews from the first half of the month, and the final figure is due on 28 August. The confidence print sits with the 0.6 per cent retail drop and the dollar's move to a May low: spending softens while household inflation expectations edge up, and markets cut the chance of a rate rise to 31 per cent. Together the three lines show US demand easing into the July-August turn, FX and policy pricing adjusting quickly, and inflation expectations not yet loosening. The final preliminary reading and any retail revisions can still update the detail. Current conditions and expectations sitting close at 51.8 and 50.6 suggest confidence rests on how households feel about spending now as well as on the outlook.[3], [1], [2]
