Delta Variant Spread Signals Spending Drop for U.S. in July

As the Delta variant makes its way across the nation, U.S. residents spent less in stores in July, the Associated Press reported.

The U.S. Census Bureau on Tuesday released the advance estimates of U.S. retail and food sales for July. The Bureau gave the estimate that July's advance monthly sales totaled around $617 billion, down from June's $624.7 billion.

According to the release, retail trade sales in July were down roughly 1.5 percent from June, but up 13.3 percent from last year's numbers. Clothing and clothing accessory stores were up 43.4 percent from July 2020 and food and drink sales were up 38.4 percent.

For more reporting from the Associated Press, see below.

July Sales Down Amidst Delta Variant Spread
Retail sales were down in July as the Delta variant spread across the nation, according to a U.S. Census Bureau release. Above, a sign hangs above the entrance of a Foot Locker store on August 2, 2021, in Chicago. Scott Olson/Getty Images

The U.S. Commerce Department said Tuesday that retail sales fell a seasonally adjusted 1.1 percent in July from the month before. It was a much larger drop than the 0.3 percent decline Wall Street analysts had expected.

The report offers the first solid glimpse of how the spread of the Delta variant of COVID-19 may have changed the spending habits of Americans. At the end of July, the U.S. Centers for Disease Control and Prevention (CDC) began recommending that even vaccinated people start wearing masks indoors in public places due to the delta variant which is causing a spike in COVID-19 cases.

According to the Commerce Department report, spending fell at stores that sell clothing, furniture and sporting goods. At restaurant and bars, spending still rose nearly 2 percent, but the rate of growth has slowed from recent months before the Delta variant spread and people were feeling safer about dining without their masks with others.

Major retailers are releasing quarterly financial results this week, offering other insights into behavior during yet another uptick in infections. On Tuesday, Walmart raised its sales outlook for the year, a sign it expects Americans to keep on shopping at the same pace.

But the Commerce Department reported Tuesday that even online sales have started to stall, falling 3.1 percent from the month before. Companies have reported a slowdown after astronomical growth last year as people stayed home and shopped more online during the pandemic.

UPS, for example, said it's shipping fewer packages in the U.S., while eBay said its number of active shoppers slipped 2 percent to 159 million in its latest quarter, and Amazon, the world's largest online retailer, said online sales grew 13 percent in its most recent quarter, the company's smallest quarterly online sales growth in two years.

July Sales Down As Delta Variant Spreads
Americans cut back on their spending last month as a surge in COVID-19 cases kept people away from stores. Retail sales fell a seasonally adjusted 1.1 percent in July from the month before, the U.S. Commerce Department said Tuesday. Above, pedestrians pass the Macy's store in the Downtown Crossing shopping area in Boston on July 14, 2021. Charles Krupa/Associated Press