A Hazy Picture: July 13 – 17

Gas prices pulled back in June, and so did the growth in retail sales. Here are five things we learned from U.S. economic data released during the week ending July 17. 

Consumer prices fell in June. The Consumer Price Index (CPI) declined 0.4 percent on a seasonally adjusted basis, after gains of 0.9 percent, 0.6 percent, and 0.5 percent over the past three months. This left the Bureau of Labor Statistics measure up 3.5 percent over the past year. Energy prices plummeted 5.7 percent, dragged down by a 9.7 percent decline for gasoline and a 1.0 percent drop for electricity. (Note that both remained 26.7 percent and 4.0 percent above year-ago levels.) Food CPI increased 0.2 percent. Excluding energy and food, core CPI was unchanged for the month and up 2.6 percent over the past year. Prices fell for apparel (-0.6 percent), transportation services (-0.3 percent), medical care commodities (-0.2 percent), and used cars/trucks (-0.2 percent). Shelter prices increased 0.1 percent, while those for new vehicles held steady. 

…as did wholesale prices. The Bureau of Labor Statistics reports that the Producer Price Index for final demand fell 0.3 percent on a seasonally adjusted basis, marking its first decline since last August. The core PPI measure, which excludes energy, food, and trade services, edged up 0.1 percent (a sharp improvement over May’s 0.8 percent surge). PPI for energy (-6.4 percent) and food (-0.6 percent) declined, with the former reflecting a 12.0 percent drop in wholesale gasoline prices. Core goods PPI increased 0.2 percent, as did PPI for services. Even with the June decline, PPI has risen 5.5 percent over the past year, with core PPI up 5.1 percent. 

Retail sales cooled slightly in June. Retail and food services sales grew 0.2 percent to a seasonally adjusted $768.6 billion. The Census Bureau data series has risen 6.7 percent over the past year, with April-June sales 6.4 percent above the comparable 2025 months. Lower prices at the pump pulled down gas station sales 5.4 percent. Removing that and the 1.9 percent rise for motor vehicle/parts dealers leaves core retail sales up 0.4 percent for the month and 5.7 percent over the past year. April-June core retail sales were 5.6 percent ahead of the comparable spring 2025 sales. During the month, sales rose at retailers focused on sporting goods/hobbies (+1.3 percent), electronics/appliances (+0.8 percent), and building materials, as well as at restaurants/bars (+0.1 percent). Sales declined at health/personal care stores (-0.8 percent), grocery stores (-0.4 percent), and apparel retailers (-0.3 percent).

Manufacturing output was flat in June. Manufacturing output was unchanged, marking the first time the Federal Reserve measure failed to grow since January. Durable goods production slipped 0.1 percent, while nondurables production edged up 0.2 percent. Overall industrial production inched up 0.1 percent, matching its May gain. Output for both utilities and mining gained 0.4 percent. Manufacturing sector output and overall industrial production have risen 1.1 percent over the past year. Manufacturing factory capacity utilization slipped 0.1 percentage points to 75.7, below the 53-year average of 78.2 percent. 

Consumer confidence improved in early July. The University of Michigan’s Index of Consumer Expectations rose 4.9 points to a seasonally adjusted 54.4 (1966Q1=100). Despite the increase, the index remained 11.8 percent below year-ago levels and was the highest since February. The current conditions index surged 7.2 points to 54.9 (-19.3 percent versus July 2025), while the expectations measure added 3.3 points to 54.0 (-6.4 percent versus July 2025). One-year inflation expectations were at +4.2 percent (down 0.4 percentage points from the June forecast). The press release noted that researchers had completed “more than 70% [of survey interviews] before the resumption of US strikes against Iran on July 7 and the subsequent increase in gas prices.”

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending July 11, 2026, First-Time Claims, seasonally adjusted): 208,000 (-8,000 vs. the previous week, -13,000 vs. the same week a year earlier). 4-week moving average: 214,250 (-6.4% vs. the same week a year earlier).
• Import Prices (June 2026, All Imports, not seasonally adjusted): -0.6% vs. May 2026; +7.1% vs. June 2025. Nonfuel Imports: +0.4% vs. May 2026; +4.2% vs. June 2025.
• Export Prices (June 2026, All Exports, not seasonally adjusted): -0.6% vs. May 2026; +10.2% vs. June 2025. Non-agricultural Exports: -0.7% vs. May 2026; +10.6% vs. June 2025.
• Small Business Optimism (June 2026, Index (1985=100), seasonally adjusted): 97.4 (May 2026: 95.3; June 2025: 98.6).
• Business Inventories (May 2026, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.736 trillion (+0.3% vs. April 2026; +3.1% vs. May 2025). 
• Housing Starts (June 2026, Privately-Owned Housing Starts, seasonally adjusted annualized rate): 1.427 million (+19.0% vs. May 2026; +3.5% vs. June 2026).
• Pending Home Sales (June 2026, Index (2001=100), seasonally adjusted): 72.5 (-5.4% vs. May 2026; -0.3% vs. June 2025).
• Housing Market Index (July 2026, Index (>50 = A majority of builders feel confident about the current and near-term outlook for housing, seasonally adjusted): 37 (June 2026: 38; July 2025: 33).
• Monthly Treasury Statement (June 2026, FY2026 Year-to-Date Federal Budget Deficit): -$1.337 trillion (+2.1% vs. YTD FY2025).
• Treasury International Capital Flows (May 2026, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$262.8 billion (April 2026: +$207.4 billion; May 2025: +$316.6 billion).
• Beige Book

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