US Retail Sales Drop More Than Expected in July

US July retail sales fell 0.6% versus expectations for a 0.1% gain, but the details suggest one-off factors drove the drop. BofA's Aditya Bhave says the data does not change the bank's 75 basis-point Fed rate hike call and views July as a blip. Bloomberg's Michael McKee notes spending shifted among categories rather than collapsing, which may support the case for the Fed to hold rates. - July headline US retail sales fell 0.6% versus a 0.1% gain forecast. - The retail control group fell 0.4% and June was revised lower. - Weakness was concentrated in autos, gas stations and non-store retailers. - Clothing and other categories rose, suggesting a spending mix shift. - Aditya Bhave says early August card data shows spending back near May/June strength. - BofA keeps its call for 75 basis points of Fed rate hikes this year. - Markets showed positive equity futures and lower Treasury yields.