The Balance Today: News You Need To Know on Aug. 17, 2022

Retail sales remained essentially unchanged in July from June as people kept shopping, but falling gas prices and fewer car sales held retailers back from making bigger profits. Economists were forecasting a drastic slowdown in consumer spending in July—expecting just a slight gain of 0.1%—after June’s revised gain of 0.8%, but today’s figures came in even lower than what they thought as inflation continues to weigh on our wallets.

People in the U.S. are still spending much more than last year, as overall retail sales were 10.3% higher than in July 2021. They bought less gas and cars, which meant more money was freed up to spend on other goods. Shoppers flocked to online stores, which rose 2.7% in July from the month prior, and also spent more at the grocery store—a sign that people are focusing more of their spending on necessities and less on other things, like clothing and department store goods, which dropped in July.

After Walmart beat expectations in its second-quarter earnings yesterday, its strength suggested that other retailers also might post surprising numbers. But today, Target didn’t follow suit, sharing that its operating income took a big hit, falling 87% from a year ago as the store slashed prices in order to shift excess inventory.

And stocks are falling following the mixed results from retailers and weaker-than-expected retail sales data from July.

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