SCC - Why Consumer Spending May Continue To Soften

• Retail sales fell by 1.1% in July from June, as reported by the Census Bureau, with drops in sales reported across a wide variety of merchandise categories.
• While the contraction in retail sales was much larger than investors anticipated, we might have expected consumers to pull back based on survey data and other metrics.
• Consumer sentiment, as reported by the University of Michigan, plunged in July to a level that was even below that when the pandemic first emerged.
• Small businesses reported a drop in confidence to one of the lowest levels since the National Federation of Independent Businesses began its Small Business Optimism survey in 1974.

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