US CONSUMER STAPLES: Consumers: Week in Review – 9/11/2026

Consensus for Friday's advance July Census Bureau retail sales report is for a 0.1% M/M rise in overall sales (0.2% prior) with ex-autos/gas rising 0.3% (0.4% prior) and Control Group up 0.3% (0.5% prior). 

• The first month of the quarter is a key month for sales, setting both the initial base and the tone for consumption in the quarter. The Atlanta Fed's GDPNow estimate for real PCE consumption in Q3 is 4.1% Q/Q SAAR, which would be the strongest since Q1 2023.
• From the retail sales/goods side of PCE, rates of growth have probably peaked along with sequential inflation this summer and it's unlikely that real goods purchases will again produce the majority of consumption's contribution to GDP as it did in Q2 (+1.08pp, vs +1.04pp for services). But if the Control Group consensus is correct it's set to keep 3M/3M annualized (i.e. quarterly) nominal growth at 8.2%, slower than the 9.7% recent peak in May but still robust.
• The Chicago Fed's Advance Retail Trade Summary (CARTS) eyes a 0.1% M/M advance in ex-auto sales (vs 0.2% consensus). However, that is expected to translate into merely flat real sales growth. (These forecasts came out before the July CPI figures but with the report largely coming out as expected, it probably won't force much of a rethink on nominal retail sales).
• Ex-autos are seen stronger than the overall figure due to an anticipated pullback in the autos column. After June's 2.7% M/M jump in light vehicle sales volumes, which translated into a 2.0% rise in the Census Bureau auto sales series, Omdia reported a 1.2% drop in July (to 16.33 million on a seasonally-adjusted, annualized rate basis).
• Redbook retail sales rose 8.2% Y/Y in July though that's seen as usual to be exaggerating overall retail strength; the ex-autos/gas consensus for the Census Bureau report would roughly translate into a 5.3% Y/Y rate of growth.
• BofA doesn't provide estimates for the July Census retail report but reports in its latest Consumer Checkpoint that "total card spending growth eased to 5.0% year-over-year (YoY) in July, from 6.3% in June, according to Bank of America internal data. But much of the moderation appears tied to the fading of temporary boosts (i.e., the timing of major online promotions and World Cup-related spending) rather than a broad deterioration in underlying demand. Spending ex-gas still rose a solid 4.3% YoY." That included a seasonally-adjusted drop in overall spending of 0.2% M/M in July, vs the 0.6% they recorded in June.
• In terms of individual retail categories, the above note on "major online promotions" suggests some giveback in the largest retail category, non-store (i.e. online) retail which jumped 1.9% M/M in June for a 10-month best. It's likely Amazon Prime Day (and associated sales by competitors) helped boost this figure which may revert in July.

• Treasuries look to finish mixed Wednesday - well off knee-jerk highs after the July CPI inflation data came out near estimates, curves twiste steeper with Bonds leading a second half decline.
• TYU6 +2.5 at 108-18 (108-13.5 low / 108-28 high), yield -.0081 at 4.6802%, The short-term trend condition in Treasuries is unchanged: bearish and recent short-term gains are considered corrective.
• Key resistance remains intact - for now. The next important hurdle to watch is 109-03+, the 50–day EMA. A clear break of this average is required to highlight a stronger S/T corrective cycle. For bears, a resumption of the downtrend would pave the way for a test of 107-29, a Fibonacci projection.
• July's CPI report showed core pressures were very close to in-line with expectations across the board: Core CPI 0.215% M/M vs 0.21% MNI unrounded analyst median (-0.02% prior, unrounded analyst range of 0.15-0.26%). Core goods prices were a little on the high side of expectations, with core services ever so slightly on the softer side.
• Other than data, markets still reactive to US/Iran headlines as fatigue over any concrete progress builds. Hormuz Strait briefings, counter-briefings, claims of control, and demands of concessions from the US, Iran, and mediators relating to both the prospect of a deal on the Strait of Hormuz, and a wider ceasefire, looks unlikely to end any time soon.
• Look ahead: Swedish inflation report, UK trade balance precede Norges Bank Rate Decision Thursday. US data includes weekly jobless claims and July PPI. 

Treasury reported a July federal budget deficit of $432.3B, which was above the Bloomberg analyst consensus of $346B coming into the week, but in-line with the $431B estimate by the Congressional Budget Office on Monday. 

• This was the single largest monthly deficit since 2021, and a record for a July, though timing of outlays was a factor. The deficit was around $140B bigger than in July 2025, but about $100B of that can be accounted for by spending that occurred in Aug 1 last year but happened in July this year. That being the case, the comparable deficit was "only" $40B wider this year, and August's should look more favorable than 2025's $344B shortfall.
• But bigger picture, tariff refunds among other factors are leading to a ballooning deficit, after relatively decent outturns for most of the year through June vs prior years (especially compared to GDP). In July 2026, receipts were $334B, $4.5B below the prior year's due to a sharp decline in net customs duties on account of the Supreme Court's February decision to strike them down. Refunds exceeded gross collections by $36B to $26B, for a net -$10B; that was compared to a $28B net collection in July 2025.
• It leaves the cumulative deficit through the first 10 months of FY2026 at just under $1.8T, up close to $170B vs the cumulative deficit over the same period of the prior year. Again while that's partly due to the timing shift in August vs July outlays, reduced net tariff revenue will take a toll.
• Per the CBO: "Based on information available through the end of July, CBO estimates that the fiscal year 2026 deficit will be $2.1 trillion—$200 billion more than the $1.9 trillion deficit projection that CBO published on February 11, 2026. CBO expects 2026 outlays to be close to the February baseline amounts. Revenues, by contrast, are anticipated to be about $200 billion below the February projections, mostly because of smaller-than-expected collections of tariff duties." Within this, CBO estimates that customs duties collected will be $250B (60%) below earlier projections.
• The medium-term impact is due to be mitigated by replacement tariffs imposed after the Supreme Court decision, including so-called  301 tariffs, and CBO expects those "will replace a substantial share of the revenue that would have been collected from the tariffs in place before the Supreme Court’s decision". But instead of posting a nominal deficit roughly comparable to the prior two years (both around $1.8T), 2026 is likely to show the 3rd largest shortfall ever (after 2020 and 2021 around $3T each amid Covid responses).