US Economy Stumbles as Retail Sales Contract, Inflation Cools, and Fed Rate Hike Bets Evaporate

US retail sales plunged 0.6% in July — the sharpest monthly drop in months and a brutal miss against the +0.1% economists had penciled in. Consumers pulled back hard, reversing June's modest 0.2% gain and sending the US Dollar Index tumbling back below 100.00. Year-over-year sales still hold at +5.0%, but the monthly snap is a gut check for anyone betting on unshakable American consumer resilience.

Behind the Data

July's retail collapse didn't happen in a...