A drop in gas prices in July led people to spend a bit less at the pump than they did in June, which freed up cash for other things, according to data from the Census Bureau on Wednesday. While overall retail spending stayed flat for the month, people spent more in July on electronics, construction materials, and at online stores, highlighting how much fuel price relief is helping out our budgets. Besides the gas pump, people also spent less money on cars and parts, and at clothing and department stores in July. Overall, the report showed that inflation can cut both ways. Since prices for many goods actually fell in July, your dollars went farther while shopping. Real retail spending, adjusted for inflation, rose 0.6%, according to an analysis by Wells Fargo—the first increase in three months. But one bit of good news doesn’t mean inflation is done wreaking havoc on our wallets. Indeed, taking a longer view, spending at gas stations was up about 40% over the last 12 months. “Once the kids return to school and the bills come due, households will begin to tighten their belts,” Tim Quinlan and Shannon Seery, economists at Wells Fargo, wrote in a commentary Wednesday. “Even as inflation is showing signs of moderating, it will do so only slowly.” Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
