Americans cut back on their spending last month as a surge in Covid-19 cases kept people away from stores, Reuters reports.

Retail sales fell a seasonal adjusted 1.1 per cent in July from the month before, the US Commerce Department said on Tuesday. It was a much larger drop than the 0.3pc decline Wall Street analysts had expected.

The report offers the first solid glimpse of how the spread of the delta variant of Covid-19 may have changed the spending habits of Americans.

According to Tuesday's report, spending fell at stores that sell clothing, furniture and sporting goods. At restaurant and bars, spending still rose nearly 2pc, but the rate of growth has slowed from recent months before the Delta variant spread and people were feeling safer about dining without their masks with others.