by Retail sales rose 5% year over year in July, but home furnishings sales fell 1.2% as consumers continued to spend in other categories
WASHINGTON — The U.S. Census Bureau released its advance estimates of U.S. retail and food services sales for July, and the latest data show that U.S. consumers are still spending, even if spending pulled back slightly from June.
Advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $763.6 billion, down 0.6% from the previous month and up 5% from July 2025.
Sales for May through July were up 6.3% year over year, while sales for the first seven months of the year were up 5.2%. July’s monthly decline does not necessarily mean that consumers have suddenly stopped spending, particularly given the continued year-over-year growth. Rather, the year-over-year numbers show continued growth in retail spending, even as consumers appear to be more selective about where their money goes.
Furniture and home furnishings were among the biggest weak spots in the latest report from the Census Bureau. July sales were essentially flat with June, rising just 0.3%, but were down 1.2% from July 2025. The category was down 0.5% for the May to July period and down 1.7% for the first seven months of 2026.
So if consumers are still spending, why are they putting off furniture purchases?
Several discretionary retail categories posted solid year-over-year gains in July. Miscellaneous retailers were up 10.7%, while sporting goods, hobby, book and music stores rose 10.1%. Nonstore retailers increased 7.7%, building material and garden equipment and supplies dealers were up 6.7%, and electronics and appliance stores rose 4.7%.
Even excluding gasoline stations, which were up 16.2% year over year, retail sales were still up 4.2% from July 2025 to July 2026.
Consumers can continue to spend while simultaneously becoming more cautious about larger, less frequent purchases. A new book, sporting goods purchase or electronic device can feel like a relatively manageable expense. A new sofa, dining set or bedroom group represents a much larger financial commitment — one that can often be postponed.
That distinction could be particularly important in the current environment. Consumers are still facing uncertainty around the broader economy, housing costs and interest rates. For consumers who are already feeling pressure from those expenses, delaying a major furniture purchase may be easier than cutting out smaller discretionary purchases altogether.
The July numbers don’t tell us exactly why consumers are holding back on furniture. But they do make one thing clear: The furniture slowdown is happening against a backdrop of continued consumer spending.
For the furniture industry, the challenge may be less about convincing consumers to spend and more about convincing them that now is the time to make the bigger purchase. Whether that changes in the months ahead will be something worth watching closely.
