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Shoppers spent at a healthy pace in July, particularly at the nations auto dealerships, even as President Donald Trump‘s tariffs start to take a toll on jobs and lead to some price increases. But the figures also underscore anxiety among Americans: all the uncertainty around the expansive duties appears to be pushing them to step up their purchases of furniture and other items ahead of the expected price increases, analysts said. Retail sales rose a solid 0.5% last month from the previous month, and June spending was stronger than expected, according to the Commerce Department’s report released Friday. June’s retail sales were revised upward to 0.9% from the original 0.6% increase, the agency said. The pace in July matched economists’ estimates. The increases followed two consecutive months of spending declines in April and May. Excluding auto sales, which have been volatile since Trump imposed tariffs on many foreign-made cares, retail sales rose 0.3% in July. Auto sales rose 1.6%. They appear to have returned roughly to normalized spending after a surge in March and April as Americans attempted to get ahead of Trumps 25% duty on imported cars and parts and then a slump after that, according to Samuel Tombs, chief U.S. Economist at Pantheon Macroeconomics. The data showed solid spending across various stores. Business at clothing stores and online retailers saw increases. Business at home furnishings and furniture stores had strong sales gains. However, at electronics stores, sales were down. And business at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, also fell, as shoppers eat at home to save money. A category of sales that excludes volatile sectors such as gas, cars, and restaurants rose last month by 0.5% from the previous month. The figure feeds into the Bureau of Economic Analysiss consumption estimate and is sign that consumers are still spending on some discretionary items. Tuan Nguyen, an economist at RSM US, noted the difficulty of attributing the entire July gain to resilient American shoppers given so much uncertainty surrounding the economy and tariffs. A sizable portion of the gain likely came from rising prices of imported goods under the impact of tariffs, he said. Nguyen also noted he can’t dismiss the possibility that consumers once again pulled forward their spending ahead of the August tariff deadline, taking advantage of Amazon Prime Day sales as well as competing sales from the likes of Walmart and Target. In fact, Nguyen noted the sharp rise in furniture sales, for example, appeared to indicate shoppers were trying to get ahead of the duties. There is nothing fundamentally wrong with American households that would suggest a spending recession given that shoppers are in a strong enough financial position to accelerate purchases, he wrote. “With so much noise in the data, the rest of the year promises to be a wild and bumpy ride. Earlier this month, the Labor Department reported that U.S. hiring is slowing sharply as Trumps trade policies paralyze businesses and raise concerns about the outlook for the worlds largest economy. U.S. employers added just 73,000 jobs last month, the Labor Department reported, well short of the 115,000 expected. Another government report, issued Tuesday, on U.S. inflation showed that inflation was unchanged in July as rising prices for some imported goods were offset by declining gas and grocery prices, leaving overall prices modestly higher than a year ago. Consumer prices rose 2.7% in July from a year earlier, the same as the previous month and up from a post-pandemic low of 2.3% in April. On a monthly basis, prices rose 0.2% in July, down from 0.3% the previous month, while core prices ticked up 0.3%, a bit faster than the 0.2% in June. The new numbers suggest that slowing rent increases and cheaper gas are offsetting some impacts of Trumps sweeping tariffs. Many businesses are also likely still absorbing much of the cost of the duties. The consumer price figures likely reflect some impact from the 10% universal tariff Trump imposed in April, as well as higher duties on countries such as China and Canada. But that may change. U.S. wholesale inflation soared unexpectedly last month, signaling that Trumps taxes are pushing costs up and that higher prices for consumers may be on the way. The Labor Department reported Thursday that its producer price index which measures inflation before it hits consumers rose 0.9% last month from June, biggest jump in more than three years. The report comes as major retailers like Walmart and Target are slated to report their fiscal second-quarter earnings reports starting next week. Analysts will study the reports to get insight into the state of consumer behavior. But they will also monitor how much stores are passing on the tariffs costs to shoppers. In May, Walmart, the nations largest retailer, warned t hat it had increased prices on bananas imported from Costa Rica from 50 cents per pound to 54 cents, but it noted that a large sting for shoppers wouldn’t start to appear until June and July. But a growing list of companies including Procter & Gamble, e.lf. Cosmetics, Black & Decker and Ralph Lauren told investors in recent weeks that they plan to or have already raised prices. Some are trying to be selective and focusing on raising prices on just their premium products as a way to offset the higher costs from tariffs. Warby Parker, which has been shifting their sourcing away from China, told analysts last Thursday that it plans to keep its $95 option. But its increasing prices on select lens types. It also wants to cater more to older shoppers who need more expensive progressive lens. Warby Parker said that progressives, trifocals and bifocals make up roughly 40% of all prescription units sold industrywide. But just 23% of Warby Parkers business now is made up of progressives, its highest priced offering and offer the highest profit margins. We were able to quickly roll out select strategic price increases that have benefited our growth, Neil Blumenthal, co-chairman and co-founder and co-CEO of Warby Parker, told analysts last week. Anne D’Innocenzio, AP retail writer
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E-Commerce
China’s economy showed signs of slowing in July as factory output and retail sales slowed and housing prices dropped further, according to data released Friday.Uncertainty over tariffs on exports to the United States is still looming over the world’s second-largest economy after President Donald Trump extended a pause in sharp hikes in import duties for 90 days, beginning Monday, following a 90-day pause that began in May.As officials worked toward a broader trade agreement, China reported earlier that its exports surged 7.2% in July year-on-year, while its imports grew at the fastest pace in a year, as businesses rushed to take advantage of the truce in Trump’s trade war with Beijing.But that also reflected a lower base for comparison, and manufacturers have slowed investments, hiring and production as they watch to see what comes. Chinese manufacturers also have ramped up shipments to Southeast Asia, Africa and other regions to help offset lost business in the U.S.“Exports remained a bright spot although the boost from front-loading appears to be tapering off and has started to show up in weak industrial production, as we anticipated,” Oxford Economics’ Sheana Yue wrote in a report.China also has been enduring flooding from torrential seasonal rains that have disrupted business activity in many parts of the country.The statistics bureau’s report said the economy had shown “notable resilience and vitality against the complex and volatile external environment and adverse impacts from extreme domestic weather.”Annual growth in industrial output slowed to 5.7% in July from 6.8% in June, the National Bureau of Statistics said. That was an 8-month low.Investments in factory equipment and other fixed assets rose a meager 1.6% in January-July, compared with 2.8% growth in the first half of the year.“Chinese economic activity slowed across the board in July, with retail sales, fixed asset investment, and value added of industry growth all reaching the lowest levels of the year,” Lynne Song of ING Economics said in a report.Property investments plunged 12% in the first seven months of the year, with residential housing investment dropping nearly 11%.Prices for newly built housing in major cities fell 1.1%, as a prolonged downturn in the property industry lingered.Yue of Oxford Economics said prices could continue to fall before stabilizing in 2028.The meltdown in the housing market hit just as the COVID -19 pandemic began, sapping one of the economy’s main drivers of growth and causing dozens of developers to default on their debts.The crisis rippled throughout the economy, destroying jobs for millions of people.The government has sought to ensure that most housing that was paid for gets built, but sales remain weak despite a series of moves meant to entice families into back into the market.Since most Chinese families have their wealth tied up in property, the anemic housing market has been a major factor crimping consumer spending. In July, retail sales rose 3.7%, the slowest rate in seven months and down from a 4.8% increase in June.The unemployment rate rose to 5.2% from 5% as university graduates began looking for work.While consumer prices rose 0.4% in July from the month before, prices at the wholesale level slipped 3.6% from a year earlier in another indicator of relatively weak demand. Shihuan Chen in Beijing contributed to this report. Elaine Kurtenbach, AP Business Writer
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E-Commerce
A senior lawyer in Australia has apologized to a judge for filing submissions in a murder case that included fake quotes and nonexistent case judgments generated by artificial intelligence.The blunder in the Supreme Court of Victoria state is another in a litany of mishaps AI has caused in justice systems around the world.Defense lawyer Rishi Nathwani, who holds the prestigious legal title of King’s Counsel, took “full responsibility” for filing incorrect information in submissions in the case of a teenager charged with murder, according to court documents seen by The Associated Press on Friday.“We are deeply sorry and embarrassed for what occurred,” Nathwani told Justice James Elliott on Wednesday, on behalf of the defense team.The AI-generated errors caused a 24-hour delay in resolving a case that Elliott had hoped to conclude on Wednesday. Elliott ruled on Thursday that Nathwani’s client, who cannot be identified because he is a minor, was not guilty of murder because of mental impairment.“At the risk of understatement, the manner in which these events have unfolded is unsatisfactory,” Elliott told lawyers on Thursday.“The ability of the court to rely upon the accuracy of submissions made by counsel is fundamental to the due administration of justice,” Elliott added.The fake submissions included fabricated quotes from a speech to the state legislature and nonexistent case citations purportedly from the Supreme Court.The errors were discovered by Elliott’s associates, who couldn’t find the cases and requested that defense lawyers provide copies.The lawyers admitted the citations “do not exist” and that the submission contained “fictitious quotes,” court documents say.The lawyers explained they checked that the initial citations were accurate and wrongly assumed the others would also be correct.The submissions were also sent to prosecutor Daniel Porceddu, who didn’t check their accuracy.The judge noted that the Supreme Court released guidelines last year for how lawyers use AI.“It is not acceptable for artificial intelligence to be used unless the product of that use is independently and thoroughly verified,” Elliott said.The court documents do not identify the generative artificial intelligence system used by the lawyers.In a comparable case in the United States in 2023, a federal judge imposed $5,000 fines on two lawyers and a law firm after ChatGPT was blamed for their submission of fictitious legal research in an aviation injury claim.Judge P. Kevin Castel said they acted in bad faith. But he credited their apologies and remedial steps taken in explaining why harsher sanctions were not necessary to ensure they or others won’t again let artificial intelligence tools prompt them to produce fake legal history in their arguments.Later that year, more fictitious court rulings invented by AI were cited in legal papers filed by lawyers for Michael Cohen, a former personal lawyer for U.S. President Donald Trump. Cohen took the blame, saying he didn’t realize that the Google tool he was using for legal research was also capable of so-called AI hallucinations.British High Court Justice Victoria Sharp warned in June that providing false material as if it were genuine could be considered contempt of court or, in the “most egregious cases,” perverting the course of justice, which carries a maximum sentence of life in prison. Rod McGuirk, Associated Press
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E-Commerce
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