Retail Sales Dive 0.6 Percent in July as Tax Refund Stimulus Abruptly Ends

The Republican tax refund stimulus is over. Please consider the Census Department report on Advance Retail Sales for June of 2026. Advance estimates of U.S. retail and food services sales for July 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $763.6 billion, down 0.6 percent (±0.4 percent) from the previous month, but up 5.0 percent (±0.5 percent) from July 2025. Total sales for the May 2026 through July 2026 period were up 6.3 percent (±0.5 percent) from the same period a year ago. The May 2026 to June 2026 percent change was unrevised from up 0.2 percent (±0.3 percent). The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.” The report only lists nominal sales, not real (inflation-adjusted sales). It’s real sales that feed GDP. Note the negative revision to June. “The May 2026 to June 2026 percent change was unrevised from up 0.2 percent (±0.3 percent).” The Commerce Department does not revise the numbers in data feed downloads. Thus June nominal was 0.0 percent and June real was 0.5 percent not 0.7 percent as shown on my chart. Advance Retail Sales Month-Over-Month Month-Over-Month Nominal Retail Sales - Total: -0.6 percent - Excluding Motor Vehicles: -0.3 percent - Excluding Motor Vehicles and Gas: 0.4 percent - Motor Vehicles: -1.8 percent - Nonstore Sales: -2.2 percent - Food Service: 0.5 percent - Food Stores: 0.2 percent - Gas Stations: -0.9 percent - General Merchandise: 0.3 percent Weakness is pervasive except food service. Note the huge 2.2 percent decline in nonstore sales. Real vs Nominal Retail Sales Month-Over Month Percent Change - Nominal Total: -0.6 percent - Real Total: -0.7 percent Those numbers are from the lead chart. Real vs Nominal Advance Retail Sales percent Change from Year Ago Nominal sales are up 5.0 percent from a year ago. Real sales are only up 1.7 percent/ The difference is the inflation gap, currently 5.0 minus 1.7. That’s 3.3 percentage points out of 5.0. Thus, inflation accounts for 66 percent of the increase in nominal retail sales from a year ago. Real vs Nominal Retail Sales in Millions of Dollars There was a massive surge in inflation in 2020 and 2021 with three rounds of largely unwarranted and definitely excessive rounds of fiscal stimulus under Trump and Biden. Trump wanted more fiscal stimulus than Congress gave him. Then Democrats went totally nuts under Biden. The Fed compounded this error with ridiculous QE lowering mortgage rates and putting still more money into people’s pockets. The Fed has never admitted this error. Real vs Nominal Retail Sales Detail Real vs Nominal Sales Notes - Real retail sales peaked in March of 2021 at 233,440. They are now 229,439 That’s a decline of 2,344 or 1.7 percent. - In March of 2021, nominal sales were 603,581. They are now 763,602. That’s an increase of 153,504 or 26.5percent. Over 100 percent of the increase in retail sales since March of 2021 is due to inflation. Didn’t someone campaign on fixing this? Related Posts August 12, 2026: July CPI Report Not as Good as Numbers Look at First Glance The consumer price index rose the expected 0.1 percent, but significant troubles lie ahead. August 12, 2026: Look Ahead Inflation Numbers Do Not Support a Fed Pause in September Today’s CPI report is history. Let’s look ahead. August 13, 2026: Producer Price Index PPI Was Unchanged in July but What’s Ahead? The PPI was flat in July, mostly due to big decline in gasoline and food. This won’t last. Correction In two places I incorrectly referred to the BLS revisions, now corrected to Commerce Department revisions. As I recall inflation (and lots of other BS) was going to be “fixed overnight”. NOT! We need a “Trump Translation Guide”. Words like “…Begging…” mean “Not At All” Words like “…Overnight…” mean “Not only NO, but it will actually get worse” Words like “…Deal…” mean “Not for you, but for me and my cronies who front ran this!” “Nominal sales are up 5.0 percent from a year ago.” The Johnson Redbook index, which reports yoy same store sales figures, has been showing sales growth of over 8% for a while. People are spending like crazy, but it’s mostly higher prices. Inflation is under reported. The THIRD term will be for FIXING things… for now, while Republicans stand idly by… there is more shit to BREAK. USS Lincoln’s deployment was ‘not nearly long enough’… says the guy who has never served… and isn’t fit for office. “The Fed has never admitted this error.” Have they ever admitted to any error? https://www.yahoo.com/news/politics/articles/us-says-lower-oil-prices-030221294.html So wait, Iran’s (nonexistent) nuclear program isn’t that big a deal anymore? Now oil prices are the new pretext? Gee, why didn’t anyone think of that before starting a war on behalf of Israel? N. Korea leader’s sister says nuclear program ‘non-negotiable’ https://globalnation.inquirer.net/326371/n-korea-leaders-sister-says-nuclear-program-non-negotiable Yes JD Vance is trying to change the narrative. Bringing down the price of gas is now priority #1 over keeping Iran from getting a nuclear weapon. However, Trump disagrees and even today emphasized that Americans need to accept higher gasoline prices as the price for keeping Iran from having nukes. I’m sure this is Vance trying everything he can to distance himself from the war. “Over 100 percent of the increase in retail sales since March of 2021 is due to inflation.” Ouch. As a stagflation baby (high school graduation year, law school graduation year), perpetually in a mind-frame of austerity while slipping backwards, I have got by, and added to my net worth, but it has been a climb, every inch. A slippery climb. So I’m so glad Trump is redecorating DC and carrier technology. I really need a triumphal arch and a steam catapult right about now. I welcome the sacrifices of tariffs today, to build dream factories some day. Oh, and a fruitless war or two. it will be fun to watch the US dollar become decoupled from petroleum and global security and trade. Take that, Canada! Bunch of maple syrup junkies. And I can’t wait for us to assume the liabilities of Cuba. So much important stuff to enjoy! Perhaps retail sales are slower in the US because all the people with money to spend are traveling outside the country? What’s that about gasoline costing more? 😁 Rich Americans aren’t just chasing low taxes, lifestyle anymore. Here’s what’s now driving the ‘millionaire migration’ https://finance.yahoo.com/news/rich-americans-arent-just-chasing-204500732.html “Real retail sales peaked in March of 2021 at 233,440. They are now 229,439 That’s a decline of 2,344 or 1.7 percent.” March 2021-March 2026: real GDP has grown 14.5%. S&P 500 is up nominally 86% since March 2021. Having heard 20 million times that “the consumer is 2/3 the economy”…I would not expect these things to occur together over a 5-year period. I suspect that it is no longer retail sales that drive the economy, but AI – AI buildouts, hiring, chip purchases. And the growth in the stock market that is enabling those in the stock market to spend more than they would, support children, granschildren – good trickle down economics. Signs lead to a recession coming soon. To your point about “excessive and unneeded stimulus checks” – I still have all those check proceeds in emergency savings. I’d opine that in the “we regular shmoes world” real world inflation is running more than 3.3% Related to last post. “Mish, it would be good if you did a post discussing the issues regarding steam catapults vs. EMALS instead of just trashing Trump on this. Both types of catapults have their pros and cons, but the EMALS have had reliability issues in the past.” OK let’s debate is the earth is flat. And let’s debate whether the earth is only 3,000 years old. What about horses vs the horseless carriage? The military experts in the US Army and Navy tried to talk Trump out of it. China trashed steam in all of its ships. There is nothing to discuss other than how stupid Trump is. If Trump were to declare electricity to be impractical and dangerous, his cult would start buying candles and using smoke signals. Luddites.