U.S. Consumer Spending Weakens for the First Time in 2026

The U.S. consumer just posted its first meaningful pullback of the year.
Control-group retail sales, the core measure used in GDP calculations, fell 0.4% in July after running near 0.9% monthly growth through much of the spring.
Headline retail sales dropped 0.6%, missing expectations for a small increase.
That matters because consumer spending accounts for roughly 70% of U.S. GDP.
Corporate guidance remains relatively strong, but the customer is beginning to weaken — and earnings expectations often adjust after consumer behavior does.
Consumer discretionary names could be the first place to watch.
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