The Commerce Department said on Tuesday that retail sales increased 0.7 percent last month.
The rate of increase in sales in June was raised to 0.3 percent instead of 0.2 percent in the previous report.
Economists polled by Reuters had expected retail sales to rise 0.4 percent.
Retail sales were likely boosted by an Amazon promotion last month.
Demand remained strong despite the US Federal Reserve raising interest rates sharply to curb inflation.
Reducing inflation boosts the purchasing power of consumers.
Excluding autos, gasoline, building materials and food services, retail sales rose 1 percent in July.
The increase in core retail sales in June was cut to 0.5 percent from 0.6 percent in the previous report.
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