Target, as well as Walmart and Macy’s, are set to report their second-quarter earnings next month. (Nam Y Huh/AP)
key takeaways:
- U.S. retail sales rose 0.2% in June after a revised 1% gain in May as shoppers cut back spending amid economic uncertainty.
- Online sales rose 1.9% on Amazon Prime Day activity, while lower gas prices and low inflation helped support consumer spending.
- Upcoming earnings reports from Walmart, Target and Macy’s could provide further insight into consumer behavior as inflation and energy risks remain.
New York – Shoppers slowed their spending in June compared to May amid continued economic uncertainty and diminishing benefits from generous government tax refunds.
Retail sales rose 0.2% in June, after rising a revised 1% in May, according to a July 16 report from the Commerce Department. Excluding turnover at gas stations, retail sales rose a strong 0.7%.
Turnover at clothing and accessories stores declined 0.3%, while online sales rose 1.9%, boosted by spending around Amazon’s Prime Day event on June 23-26. The turnover of sporting goods, hobbies, musical instruments and bookstores grew 1.3%, helped by spending around the World Cup.
The data only provides a snapshot of consumer spending and does not include activities such as travel and hotel stays. The only services category – restaurants – recorded a growth of 0.1%.
The report comes as U.S. inflation eased last month as prices for gas, clothing and used cars eased, providing some relief to consumers, while underlying price pressures also eased more slowly than anticipated.
U.S. retail and food services sales in June 2026 were $768.6 billion, up 0.2% from May 2026.
🛍️ https://t.co/p65hcrjkOx #CensusEconData #retail sales pic.twitter.com/8uPB37w67F
– US Census Bureau (@uscensusbureau) 16 July 2026
According to motor club AAA, gas prices fell to $3.94 a gallon on July 16, down from $4.04 a month earlier.
The Labor Department said on July 14 that consumer prices fell 0.4% from May to June, the largest monthly decline in four years, after rising 0.5% in the previous month. On an annual basis, inflation eased to 3.5%, down from a year-on-year gain of 4.2% in May and lower than many economists had expected.
According to economists, headline inflation data shows that the Iran war has pushed up gas prices, while it has pushed up airfares and some other costs, but so far has not led to broad-based, sustained inflation. But the United States resumed attacks on Iran and President Donald Trump announced a new blockade of the Strait of Hormuz, a key shipping route for about a fifth of the world’s oil. The increase threatens to undo at least some of the progress made over the past month.
Next month, major retailers including Walmart, Target and Macy’s are scheduled to report their second-quarter earnings, which will provide some insight into shopping behavior.
A report last month from the Conference Board showed that Americans’ attitudes toward the economy improved slightly this month due to falling gas prices, but their outlook is still mostly negative by historical standards.
Sarah Williamson, 27, a software support engineer in Raleigh, N.C., said that over the past year she has been more conscious about how she spends her money. She feels financially secure given her steady job, but the rising costs of food and gas are driving her away from extravagance.
“Overall, I do less shopping as a hobby,” she said.
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Williamson explained that at the supermarket, she avoids buying pre-cut fruits like cantaloupe, which are more expensive than buying a whole cantaloupe, to save money, and is careful about buying clothes for herself. She recently purchased a dress on the TikTok shop for $30 including shipping costs and a cotton nightgown on Amazon for $72 including shipping costs. The nightgown cost more than her usual expense, but she felt the price was worth it since she wears it a lot.
Brian Reynolds, CEO and founder of Just for Teens, a skin care line for tweens and teens, said his lower-priced products, including $5 pimple patches, are for families who are on a budget and are in a good spot for retail sales right now.
By October, their brand will expand to 10,000 Dollar General stores, up from about 4,000 at the end of last year. He said sales have been good so far, but he expects business to pick up further during the back-to-school sales season.
“There is a lot of room for products that are everyday essentials and are priced appropriately,” he said.
