Retail sales data released by the U.S. Census Bureau shows consumers continued to increase their spending in July while the growth of the economy is moderating, says Jack Kleinhenz, National Retail Federation chief economist.

Retail trade sales were up 1.1% from June 2024 and up 2.6% from July of 2023. E-commerce retailers reported an increase of 6.7% from last year, according to the Census Bureau.

“July’s retail sale figures mirror the strength in the economy, which continues to expand even though there are pressures on growth,” Kleinhenz says. “The midsummer boost from back-to-school and college spending along with special deal days offered by retailers clearly helped. Households are proceeding with measured spending and getting the benefit of falling retail prices despite still-elevated prices for services. Even with growth of the labor force cooling, consumer spending remains the backbone of the economy and is keeping the expansion on a positive path. We are all waiting to see what direction the Fed will take with interest rates.”