US Retail Sales Drop More Than Expected in July

• US July retail sales fell 0.6% M/M, significantly below the estimated 0.1% rise.
• Retail sales ex-auto fell 0.3% M/M, and the 'control group' sales (used for GDP) fell 0.4% M/M.
• Key weak areas included motor vehicles & parts (-1.8%) and non-store retailers (-2.2%), while clothing and general merchandise stores saw increases.
• US 2-year and 10-year Treasury yields declined following the report, while equity futures remained marginally positive.
• BofA Securities economist Aditya Bhave considers the dip a 'one-off' event, citing Prime Day's shift to June and a July 4th heatwave, maintaining a view of strong underlying spending.

US retail sales fell more than expected in July, declining 0.6% month-over-month against a forecast of a 0.1% rise, with significant drops in auto and non-store retail sales. Despite the disappointing headline figures, an economist from BofA Securities views this as a 'one-off blip' due to factors like Prime Day timing and a heatwave, suggesting underlying consumer spending remains resilient.