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Retail Sales Tumble as Delta Infections, Inflation Surge Hits Spending

July retail sales fell 1.1% from the previous month, Commerce Department data showed Thursday, well shy of the 0.3% decline analysts' had forecast.

U.S. retail sales fell sharply last month, data from the Commerce Department indicated Tuesday, suggesting the recent surge in Delta-variant infections is beginning to impact consumer strength in the world's biggest economy.

July retail sales tumbled 1.1% from last month, the Commerce Department said, notably shy of the Street consensus forecast of a 0.3% decline. The June total, however, was revised modestly higher, to a gain of 0.7% on the month. Stripping out auto and gasoline sales, June retail sales were down -0.4%, the Commerce Department report noted.

Consumer price increases may have also impacted consumer spending, as July inflation was pegged 5.4% higher than last year -- the fastest rate of increase since 2008 -- according to data from the Bureau of Labor Statistics published last week.

Job gains, however, have been robust, with 943,00 new positions added to the economy in July, paired with one of the strongest gains in average hourly earnings -- 4% -- on record.

U.S. equity futures pared earlier declines immediately following the data release, with contracts tied to the Dow Jones Industrial Average indicating a 170 point opening bell decline and those linked to the S&P 500 priced for an 18 point retreat.

Benchmark 10-year Treasury note yields, which traded at a 10-day low of 1.223% in overnight dealing, edged higher to 1.247% while the dollar index was marked 0.2% higher on the session at 92.845 against a basket of six global currencies.

Two of the countries biggest retailers -- Walmart  (WMT) - Get Free Report and Home Depot  (HD) - Get Free Report -- posted stronger-than-expected second quarter earnings Tuesday, but each also noted significant decreases in the pace of domestic same-store sales.