Retail Sales Drop, U.S. Warships in Distress, Accurately Polling the Electorate

**Eder Peralta** (0:02)
New economic numbers show Americans pulling back on spending. Sales were down at gas stations, grocery stores and car dealerships in July.

**Danielle Kurtzleben** (0:09)
Paychecks for American workers keep losing ground to inflation.

**Eder Peralta** (0:14)
I'm Eder Peralta.

**Danielle Kurtzleben** (0:15)
I'm Danielle Kurtzleben, and this is Up First from NPR News.
The price of gas is high. People's wages aren't keeping up. Employers also shed tens of thousands of jobs in July, squeezing people even more.

**Eder Peralta** (0:30)
Sailors board some US warships are sending distress signals as the war in Iran drags on. The water is contaminated, the equipment is breaking down, and they need fresh food.

**Danielle Kurtzleben** (0:41)
And finally, how accurate has polling been so far this election cycle?

**Eder Peralta** (0:46)
Stay with us. We have the news you need to start your weekend.

**Danielle Kurtzleben** (1:00)
Government number crunchers gave us a flurry of economic data this week. Put together, it helps to color in a picture of the ways that Americans are making, saving, borrowing and spending money.

**Eder Peralta** (1:10)
NPR's Scott Horsley and Alina Selyuk join us now. Hey there.

**Danielle Kurtzleben** (1:14)
Hello, hello.

**Scott Horsley** (1:15)
Good morning.

**Eder Peralta** (1:15)
So Alina, let's start with you. What's happening with prices these days?

**Alina Selyuk** (1:20)
Well, they're still going up, but not as fast as they had before. In fact, inflation cooled for the second month in a row in July, which is the latest data that we got this week. So from June to July, consumer prices rose just one-tenth of a percent. That's a reprieve from the sharp price increases we saw in late spring after the US war with Iran began. The cost of groceries actually fell slightly from June to July. The one big reason was big discounts on lettuce. Supermarkets are trying to get people to buy leafy greens after the cyclospora cases.
Beef prices are still rising, but chicken and eggs are costing less.
Then there's the big question of gas prices.

**Eder Peralta** (2:01)
The eternal question of gas prices.

**Alina Selyuk** (2:03)
Yes. Gasoline prices fell a bit in July, which they also did in June, but they are still up quite a bit from a year ago. Federal data showed gas prices in July were up nearly 25 percent from last year.

**Scott Horsley** (2:16)
The challenge for a lot of families has to do with a mismatch between what's happening with prices and what's happening with their paychecks. Even though inflation has cooled off in the last couple of months, wage gains have slowed down even more.
The job market's stuck in neutral, people aren't switching jobs very often. Employers are not having to pay as much to attract workers as they did a year or two ago. Over the last 12 months, average wages have gone up just 3.2 percent. So even with somewhat tamer inflation, the typical paycheck is buying less today than it was a year ago, and that's a turnaround. For most of the last three years, wages were rising faster than prices, so people were gaining ground and catching up to the high cost of living. Now, that's reversed.

**Eder Peralta** (3:00)
I suppose you would expect spending to go down as a result.

**Alina Selyuk** (3:05)
You would expect that, but actually, depending on how you measure, you get different answers. This week, we got new data on retail sales, which is spending on cars at stores and restaurants. For the first time in months, this retail spending did decline, down 0.6 percent from June to July. But the meaning of it is not so straightforward because this is a comparison month to month. The biggest drag on that was the fact that Amazon shifted the timing of its big Prime Day summer sale event. It shifted to earlier, to June, so people did more of their online shopping in June and a lot less in July.
But then, it's important to look also at the comparison from a year ago. And looking that way, retail sales were up by 5 percent, which is a bit of a slowdown, but not a huge one. And people keep buying more things that are not necessities, like gardening supplies or sporting goods.

**Eder Peralta** (3:57)
Scott, if paychecks aren't keeping pace with prices, how are people covering their expenses?

**Scott Horsley** (4:04)
In some cases, they're borrowing. You know, a report from the New York Fed this week shows that credit card debt continued to grow in the spring. That's not unusual. And so far, we're not seeing big signs of distress, like a jump in late payments.
But for people who do carry a balance on their credit card, that is a very expensive way to borrow.