July inflation cooled as U.S. retail sales fell 0.6%.
Why it matters: The latest BLS and Census data point to softer consumer demand just as businesses and markets are watching pricing power and household spending.
- The Consumer Price Index rose 3.4% year over year in July and was unchanged from June, the BLS said Aug. 12.
- Advance retail and food-services sales fell 0.6% in July to $763.6 billion, the Census Bureau said Aug. 14.
- Sales excluding gas stations and auto dealers fell 0.2% in July, according to the Census Bureau report.
- The data came in a week when markets were parsing whether cooling inflation would be enough to support spending.
The latest federal data show a split picture for the U.S. economy: inflation eased in July, but consumer spending also weakened.
The Bureau of Labor Statistics said the Consumer Price Index rose 3.4% from a year earlier in July and was unchanged from June on a seasonally adjusted basis.
Two days later, the Census Bureau said advance retail and food-services sales fell 0.6% in July to $763.6 billion. The Census report also showed sales excluding gas stations and auto dealers slipped 0.2% from June.
Taken together, the reports suggest households are still spending cautiously even as inflation pressures moderated in July. For businesses, the combination matters because it can shape pricing decisions, inventory plans and expectations for demand in coming quarters.
By the numbers
- 3.4% - July CPI year-over-year increase, according to the BLS.
- 0.6% - July drop in advance retail and food-services sales, according to the Census Bureau.
- $763.6 billion - July retail and food-services sales total, according to the Census Bureau.
Yes, but: The data cover July only, so they show a snapshot rather than a full trend in consumer demand or inflation.