Americans cut back on spending

The U.S. Commerce Department reports that retail sales fell a seasonal-adjusted 1.1 percent in July from the month before. Wall Street analysts expected a drop of just 0.3 percent.

What accounts for the change? Auto sales fell by almost 4 percent. Spending also dipped at stores that sell clothing, furniture, and sporting goods. But Americans dished out 2 percent more cash at restaurants and bars. The delta variant of the coronavirus may be keeping more people home, but economists also think Americans are shifting their spending from goods to services such as haircuts or vacations, which were not included in Tuesday’s report. And rising prices for everything from food to washing machines may have curbed spending.

Dig deeper: Listen to Nick Eicher and David Bahnsen talk about the delta variant’s effects on the stock market on The World and Everything in It podcast.