U.S. Retail Sales Rise 0.5% in July, Slowing Momentum.

U.S. retail sales rose 0.5% in July, though growth momentum appears to be slowing.

U.S. retail sales rose less than expected in July, signaling a potential slowdown in consumer spending ahead of next month’s key Federal Reserve meeting.

Commerce Department data released on Friday showed that retail sales increased 0.5% in July, following a revised 0.9% gain in June (up from the previously reported 0.6%). Economists had forecast a 0.6% rise. On an annual basis, sales were up 3.92%, easing from 4.35% in June.

Excluding autos, sales rose 0.3%, while excluding autos and gas, they gained 0.2%. The “control group,” which strips out food services, auto dealers, building materials, and gasoline stations, climbed 0.5%.

Retail sales are often viewed as a gauge of consumer confidence, which could influence the Fed’s stance on potential interest rate cuts later this year.

Separately, July import prices increased 0.4% month-on-month, exceeding the expected 0.1% rise, while export prices edged up 0.1%, slowing from 0.5% in June.

The Federal Reserve has kept its benchmark overnight interest rate steady at 5.25%-5.50% since last July, citing inflation uncertainty following the Trump administration’s tariffs on imports from most major trading partners.

This stance has frustrated President Donald Trump, who has repeatedly urged for rate cuts and criticized Fed Chair Jerome Powell’s cautious approach.

Earlier this month, weak jobs data and a mild consumer price report fueled market expectations for a September rate cut, especially after Treasury Secretary Scott Bessent suggested a sizable 50-basis-point reduction. However, a hotter-than-expected producer price report on Thursday tempered those hopes. While a 25-basis-point cut remains widely anticipated, the prospect of a larger move has largely faded.