Americans cracked open their wallets last month, stepping up spending on everything from clothes to cars for the first time since March and easing fears that the fragile job market and weakness overseas are stalling the U.S. economy.

Retail sales rose 0.8% in July from a month before, the Department of Commerce said Tuesday, ending a three-month streak of declines that included a 0.7% drop in June and a 0.1% drop in May.

Consumer...