Retail sales slide 1.1% in July as Americans rein in spending on growing delta worries

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Americans pulled back on purchases in July as the fast-spreading delta variant introduced another round of uncertainty to an economy struggling against the evolving pandemic.

Retail sales fell 1.1% last month, the Commerce Department reported Tuesday morning, after unexpectedly picking up in June.

In all, Americans spent $617.7 billion in July. Sales of cars and auto parts — which were hurt by a shortage of computer chips — fell 3.9%, while online spending tumbled 3.1%. Consumers also cut back on clothing, furniture and groceries.

There were some bright spots, though: Gas stations, bars and restaurants all reported upticks in sales.

Analysts warned that the overall drop in retail sales — the second in three months — points to a longer term shift toward more cautious purchasing decisions.

“There are signs that pent-up demand has passed its peak,” said Ted Rossman, an analyst at CreditCards.com. “The first round of advance child tax credit payments went out in July, and unlike previous rounds of government stimulus, this didn’t lead to an immediate pop in retail spending.”