Announced this morning, Retail Sales for July decreased -1.1%, more negative than expected. Gasoline stations and Miscellaneous store retailers were strong, while Motor vehicle & parts dealers, Non-store retailers, and Clothing stores were all weak. The Control Group, which is a closer measure of the inputs for GDP by excluding sales for food, autos, building materials, and gas stations, decreased -1.0% in July which is also more negative than expected. Overall, a weak reading on the headline number and the control group, which likely shows the impacts of coming off stimulus payments earlier in the year. Strong second quarter sales from Wal-Mart, with the company citing store traffic and stimulus spending, supports that view. The health of the consumer and the labor market will be closely watched as we move beyond the impact of fiscal stimulus in the months ahead. In all, the 10-year yield ticked higher following the release of the data and equity futures are lower as we head into the market open.
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