The 0.2 percent climb fell short of the 0.6 percent gain in June, which was revised higher, and came up short of the 0.3 percent gain economists had predicted.
Sales adjusted for seasonal variations, but not for price changes, rose to $424.5 billion, a 5.4 percent gain from July 2012, the bureau said.
The bureau said vehicle sales dropped 1 percent from June. Sales also fell in the categories of furniture, down 1.4 percent, electronics, down 0.1 percent, and building materials and garden supplies, which were down 0.4 percent.
Sales at sporting good stores enjoyed a mid-summer bump, rising 1 percent from June to July. Electronic sales, meanwhile, rose marginally, gaining 0.1 percent in the month.