Retail spending rises; Residential loan demand declines; CEO confidence moves higher

U.S. spending at retail outlets bounced back in July as consumers looked to buy items ahead of import tariffs taking effect. Excluding auto and gasoline transactions, sales were up about 1.5% from the prior month and increased 5.9% from a year earlier, according to the latest tracking by researchers at the National Retail Federation and CNBC.

“Consumer spending increased in July, driven by successful summer sales events held by many retailers and shoppers continuing to pull purchases forward ahead of tariffs,” NRF CEO Matthew Shay said in a statement Monday. “Month-over-month gains were sizeable against a weaker-than-normal June.”

Based on anonymized credit and debit card data compiled by consulting firm Affinity Solutions, the latest monitor report found sales rising on a monthly basis in eight of nine tracked categories, the exception being electronics and appliances. Eight of the categories also posted year-over-year gains, with building and garden supplies being the lone decliner.

The category that includes sporting goods, book and hobby stores led for monthly gains at 2.36%. Annual increases were led by digital products such as e-books and games, rising 25% from a year earlier; and the sporting goods-books-hobby category, up nearly 10% from a year earlier.

Shay said recently enacted tariffs could raise inflation and weigh on retail sales, but household wage gains so far remain above the inflation rate. The NRF-CNBC monitor report is considered a preview of government reporting on retail sales, with July data scheduled for release Friday.

Demand for most types of residential loans, including home mortgages and construction loans, declined in the second quarter compared with the prior period, signaling continued slowing of the housing market, according to the National Association of Home Builders.

Citing the latest national Federal Reserve survey of loan officers, the trade group said tighter lending standards and elevated interest rates reduced demand in most categories, though lending tied to multifamily properties was essentially unchanged for the third consecutive quarter.

In the second-quarter Fed survey, 61.3% of loan officers said multifamily loan demand was unchanged from the prior quarter, though 19.4% said demand was moderately weaker. For home mortgages, 58.3% said loan demand was unchanged, with 23.3% saying demand was moderately weaker.

While the Federal Reserve held interest rates unchanged during the second quarter, the homebuilder trade group is forecasting two rate reductions before year’s end, including one at the Fed’s next meeting, scheduled for Sept. 16-17.

Confidence among U.S. chief executive officers increased in the latest quarterly survey by the Conference Board, but factors such as trade tariff uncertainty have corporate leaders remaining pessimistic by historical standards.

The economic research group tracks several metrics in surveys conducted with the Business Council, including capital spending, employment, recruiting and wages. Third-quarter numbers — reflecting responses from 122 chief executives — showed the CEO confidence index posting at 49, up 15 points from the prior quarter, though numbers below 50 reflect more negative than positive responses.

“CEO confidence recovered in the third quarter after collapsing in Q2, but fell short of signaling a return to optimism,” Conference Board Senior Economist Stephanie Guichard said in a statement. “The improvement is a continuation of the trend seen after tariff disputes between the U.S. and China became less intense and potentially reflects ongoing progress on trade negotiations.”

The latest CEO survey was conducted July 14-28, before the latest round of tariffs affecting goods from more than 60 countries took effect on Aug. 7. The third-quarter survey found the share of CEOs expecting workforce reductions over the next 12 months rose for the fifth consecutive quarter to 34%.