Preview: Due July 16 - U.S. June Retail Sales - Softer on gasoline, only modest underlying slowing
We expect June retail sales to fall by 0.2% overall and 0.4% ex autos, though with a 0.2% rise ex auto and gasoline. Even the latter would be the slowest gain since a flat December 2025.
The slowing in sales will come largely due to lower gasoline prices, which have seen a significant correction from June’s highs, while remaining well above pre-war levels.
Industry data suggests a second straight positive contribution from auto sales.
Ex auto and gasoline sales are vulnerable to a slowing, with consumer spending having been running well ahead of real disposable income, while June’s non-farm payroll showed slippage in retail employment and aggregate hours worked. However, resilient auto sales suggest consumers have not yet hit their limit, arguing against a decline ex auto and gasoline.
A 0.2% increase in sales ex auto and gasoline would follow two straight gains of 0.5% and be the slowest of the year to date. However it would still leave the strongest quarterly increase ex auto and gasoline since Q1 2023, by 1.7% (not annualized). The overall quarterly rise will be even stronger, lifted by gasoline.
