Retail sales fell 0.5 percent in July from June levels after gaining a revised 1.9 percent in June, seasonally adjusted. Compared to July of last year, sales were up 0.7 percent after a 3.9 percent rise in June, a marked upward revision from the originally reported 1.6 percent increase. Not since February 2022, have sales risen at a faster annual pace when they increased 13.3 percent.

The June revisions make a strong case for consumers accelerating purchases before the imposition of US tariffs in August. It was a wise decision as most observers were looking for a 15 percent tariff, the same as imposed on the European Union and not the 39 percent actually imposed.

Consumers spent 0.6 percent less in July on food, beverages, and tobacco compared to June, while sales in the unhelpfully named other goods declined 0.8 percent. By far, the largest decline was at stalls, markets, and mail order and internet sales, down 2.1 percent in July after gaining 3.6 percent the month before.

The year-on-year increase was helped by a 23.0 percent rise in outlays for information and communications products, and a 6.5 percent increase for household appliances, textiles, home renovation and accessories.

Today's data show Swiss consumers hunkering down in July, and even more so in June, in anticipation of higher prices due to tariffs. While a US appeals court has declared the bulk of US tariffs illegal, there is no further clarity with the decision on scrapping them on hold until a review by the US Supreme Court.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The survey comprises around 4,000 companies with the small-sized firms asked to provide monthly turnover data on a quarterly basis. Statistics are provided in both nominal and volume measures; the latter is the more important for financial markets. The headline figure is the annual growth in sales volumes adjusted for differences in trading days. Seasonally adjusted monthly changes are also provided. Details are limited in the first estimate but a more complete picture is provided with the following month's release.

Consumer spending accounts for a large portion of the economy, so if you know what consumers are up to, you will have a pretty good idea on where the economy is headed. Needless to say, that is a big advantage for investors. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.