Monday, September 21, 2026
When it comes to consumer spending, which drives the majority of the U.S. economy, many American consumers are tapping the brakes.
July retail sales fell 0.6% to $763 billion. That figure was the steepest monthly drop since May of last year. Meanwhile, Wall Street economists expected a 0.1% gain.
The weakness was broad across non-store retailers. That includes online giant Amazon, where sales fell 2.2%. That measure was the second-largest decline since July 2021.
Additionally, vehicle sales and auto parts sales dropped 1.8%. And perhaps most telling, control group sales, the cleanest read on underlying demand that feeds directly into gross domestic product, fell 0.4%, the worst performance since January 2025.
It’s becoming quite clear: a stretched consumer is showing up in the data.
These happenings may get a little extra play at the Federal Reserve. Why is that? Well, the Fed is considering what to do with interest rates. And there’s definitely not a consensus.
Let me explain.
At the last meeting in July, three Federal Open Market Committee voters dissented. They wanted an interest rate hike.
And now the futures market puts the odds of a September rate hike by the Fed at near 30%. That’s down from close to 50% a week ago.
So, there’s interest on the policy side to increase rates. Meanwhile, the futures lean towards no change or a rate cut.
And the whole time the American consumer is left flapping in the wind.
Daniel A. White is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Daniel A. White & Associates and CoreCap Advisors are separate and unaffiliated entities.