Shrugging Off Tariffs, Car Buyers Drive July Retail Sales

Fri, Aug 15, 2025, 9:33 AM 2 min read

• U.S. retail sales increased by 0.5% in July, aligning with economists' expectations.

• July’s figures represent a slowdown from June spending levels, which were revised higher in this month’s report.

• Auto dealers and online retailers saw some of the most significant increases in July, while spending at restaurants and bars dipped.

Consumer spending slowed down slightly in July, but the data showed that people are still making automobile purchases and shopping online even amid tariff pressures.

“Consumers maintain a moderate rate of spending and even picked up the pace in the past two months as the tariff-price pass-through has been limited thus far,” wrote Nationwide Chief Economist Kathy Bostjancic.

Census Bureau data showed that July retail sales were $726.3 billion, a 0.5% increase from the prior month. This was a slowdown from the June data, which was revised higher to show a 0.9% increase, but it was in line with economists' projections.

“The solid increase in retail sales in July and upward revisions to past months indicate consumers are down but not out this year,” wrote Michael Pearce, deputy chief U.S. economist at Oxford Economics.

Auto dealers saw a 1.6% increase in sales, while furniture retailers saw sales similarly higher. This comes as some economists are watching for tariff impacts on car sales and companies report lower furniture demand.

“After tariff distortions to auto purchases earlier in the year, consumers have returned to auto showrooms ready to buy,” wrote Bostjancic in a commentary.

A 0.8% increase in nonstore retailer sales includes results from e-commerce firms like Amazon, which held its annual Prime Day sales event in July. Miscellaneous store retailers showed the steepest decline in sales, while the restaurant and bar sales, a measure of discretionary spending, also ticked lower.

The data also detailed stronger retail sales results from June, which reflected a bounce back in spending after sales dropped in May. Economists closely follow retail sales as a measure of consumer spending because it makes up about two-thirds of U.S. economic activity.

“In a world where there are plenty of macro-related worries tied to inflation and employment, consumers are still out there spending,” said Bret Kenwell, eToro U.S. investment analyst. “Retailers will start reporting earnings next week, which should provide more insights into consumer behavior.”

Walmart (WMT), Target (TGT) and Home Depot (HD) are among a string of retailers on next week’s corporate earnings calendar.

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