Retail sales in the U.S. increased 0.2% month over month in June 2026, following an upwardly revised 1% rise in May and in line with market expectations.
This marks the smallest increase in five months, indicating a potential slowdown in consumer spending. Bank of America CEO Brian Moynihan was quick to chime in stating "Consumers continue to spend".
The BoA CEO expanded on comments given in a Q2 earnings call stating that "consumer spending continued to outperform expectations". A rather bullish take by Moynihan and one which may be challenged in the months ahead.
Despite the broader cooling trend, sales growth was still recorded in several specific sectors: motor vehicle and parts dealers (1.9%), non-store retailers (1.9%), sporting goods, hobby, musical instrument, and book stores (1.3%), and electronics and appliance stores (0.8%).
Source: U.S. Census Bureau
Jobless claims: layoffs stay historically low
The Labor Department's data showed U.S. unemployment claims fell unexpectedly, signaling continued labor market strength with low firing rates.
For the week ending July 11th, initial claims dropped to a two-month low of 208,000, easily beating forecasts of an increase. Continuing claims also fell beyond expectations to 1,805,000 for the week ending July 4th.
Despite these broader improvements, initial claims from federal employees ticked up slightly to 424 amid ongoing efforts by the administration to cut public sector jobs.
Latest US retail sales and jobless claims prints
| Indicator | Latest Print | Prior Print | Consensus |
|---|---|---|---|
| Retail Sales MoM June 2026 | +0.2% | +1% (revised) | +0.5% |
| Retail Sales YoY June 2026 | +6.7% | - | +7.3% |
| Initial Jobless Claims | 208k | 217k | 215k |
Market Reaction Mixed
The data is likely to send mixed signals to the Federal Reserve. A decline in retail sales indicates cooling consumer demand. Consumer spending is a primary engine of economic growth, weaker sales typically ease inflationary concerns, which would likely help trim Fed rate hike bets.
Conversely, a decrease in initial jobless claims points to a robust and resilient U.S. labor market. Ongoing stability in employment levels could support the case for the Federal Reserve to maintain or even raise interest rates to manage inflationary pressures.
The DXY had been on the offensive as the news filtered through and yet those gains evaporated pretty quickly. This of course is not all down to the data given the host of other factors currently impacting market sentiment.
What to Watch Later Today
The majority of the main data has now been released and yet another volatile day lies ahead.
U.S.-Iran developments are still key to sentiment as the day progresses.
There is still some data releases ahead as well as Federal Reserve speakers on the docket which could stoke volatility.
11:30 a.m. ET — Atlanta Fed GDPNow: Forecast 1.3%, Previous 1.3%. This data is a running estimate of real GDP growth based on available economic data for the current measured quarter.
