Retail Sales rise – The Daily Tearsheet

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down.

Retail Sales rose 0.5% MOM in July, according to the Census Bureau. If you strip out automobiles sales rose 0.3%. June’s estimate was revised upward to 0.9%. On a YOY basis, retail sales rose 3.9%. These numbers are not adjusted for inflation, so if you make that adjustment sales are up about a percent or so on a real basis.

Import prices rose 0.4% MOM in July and fell 0.2Q% on a YOY basis. A decrease in fuel prices is being offset by rising prices for some consumer goods.

Yesterday’s hot PPI report caused the September Fed Funds futures to price in a small chance of no move, although the overall betting odds are that we get a 25 basis point cut. After the benign CPI report, we actually had the Sept futures pricing in a small chance of a 50 basis point cut. The December futures see a toss-up between 2 and 3 cuts this year.

Mortgage delinquencies decreased to a seasonally adjusted annual rate of 3.93% in the second quarter, according to the MBA. “The seasonally-adjusted mortgage delinquency rate declined to 3.93 percent in the second quarter and remains below the historic average of 5.21 percent dating back to 1979,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Conventional loan performance continues to perform exceptionally well, with delinquencies hovering near record lows. This contrasts with the rise in government delinquencies over the past few years.”

Added Walsh, “While overall mortgage delinquencies are relatively flat compared to last year, the composition has changed. Earlier-stage delinquencies declined while serious delinquencies – those loans 90 or more days delinquent or in foreclosure – increased. This was the case in the second quarter of 2025 across the three major product types: conventional, FHA, and VA.

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