Money CNN reports:
Retail sales fell in July after two straight months of gains, the government reported Thursday -- a drop that surprised economists.
The Commerce Department said total retail sales declined 0.1% last month, compared with June's revised gain of 0.8%. Total sales were originally reported to have increased 0.6%.
Economists surveyed by Briefing.com had been expecting June sales to increase 0.7%. The much worse-than-expected monthly report followed a worrisome quarterly report from Wal-Mart (WMT, Fortune 500) Thursday in which the world's largest retailer said it logged an unexpected 1.2% drop in its second-quarter same-store sales.
Sales excluding autos and auto parts also registered an unexpected decline of 0.6% compared to a revised 0.5% increase in the measure in June. Sales, excluding autos, were originally reported to have increased 0.3% in the prior month.
How any economist thought that a cash strapped consumer would spend more on non-autos after a large auto purchase is beyond me. Though I will say the decline in overall sales, even with an increase in sales of autos, was a surprise even to me.