Sales growth at U.S. retailers fell in July after a modest increase in June, the Commerce Department said.

Retailers' sales fell by 0.6% last month to $763.6 billion, versus the 0.2% growth recorded in June. July's reading was lower than the 0.1% increase economists polled by The Wall Street Journal expected.

Retail sales numbers are recorded in nominal terms and account for the total number of dollars spent. In July, on and off peace talks in Iran caused a retreat in gasoline prices.

Outside of gasoline stations, however, sales look a bit weaker. Sales in the so-called "control-group" categories - those that feed into the formula for GDP - fell by about 0.4%, the first monthly decline this year.

Meanwhile, sales in motor vehicle and parts dealers fell 1.8%. Spending in other discretionary categories, such as furniture and home furniture stores rose 0.3%.

Some economists predicted weaker retail sales in July as the pull-forward of Amazon Prime Day deals in June may have contributed to slower sales last month. Bank of America's credit and debit card spending per household rose 5% year-over-year, down from 6.3% in June. In July's retail sales report, sales at nonstore retailers fell 2.2%.

The consumer-inflation rate cooled to 3.4% in July, the Labor Department said Wednesday, lower than June's 3.5%. Overall, consumer spending has generally held up well despite a series of ongoing supply shocks across the U.S. economy, more recently from higher gasoline prices stemming from the conflict in Iran.

"We had expected that the oil shock would likely begin to impact spending after around two quarters, and this softer data shows the deceleration that we were expecting to see," Morgan Stanley analysts said in a note.