US retail sales fell 0.8% in January instead of the expected 0.2% decline. Sales excluding autos fell 0.6% instead of the expected 0.2% rise. This drop took sales back to their lowest level since last July. Fuel sales last month were at their lowest level since October 2021, while building materials sales were at their lowest level since September this year.
US retail sales are calculated in nominal terms (not adjusted for inflation) and are now 1.1% higher than a year ago. This is well below the 3.1% year-on-year rise in prices and could be seen as a deflation of consumer activity despite the strong labour market.
Today's industrial production figures also disappointed, with a 0.1% decline in the headline index (expected +0.2% after 0.0% in the previous two months).
The American consumer is the primary driver of the economy, and industrial production, which accounts for around 10% of GDP, is often a leading indicator of the economic cycle. Both of these critical indicators have simultaneously pointed to an alarming and sudden slowdown. This should give pause to those who assume that monetary easing is imminent but are putting a new spin on it. It may no longer be a glorious victory over inflation without a recession but a concern for economic growth and an attempt to ease monetary conditions to cushion the decline.
This is negative news for the dollar as it has the potential to push markets closer to the expected date of the rate cut. In the short term, equity indices may take this news as a positive. However, for the long-term investor, it is clearly a cloud on the horizon that brings the bull market in equities closer to breaking.
The FxPro Analyst Team
- English (UK)
- English (India)
- English (Canada)
- English (Australia)
- English (South Africa)
- English (Philippines)
- English (Nigeria)
- Deutsch
- Español (España)
- Español (México)
- Français
- Italiano
- Nederlands
- Português (Portugal)
- Polski
- Português (Brasil)
- Русский
- Türkçe
- العربية
- Ελληνικά
- Svenska
- Suomi
- עברית
- 日本語
- 한국어
- 简体中文
- 繁體中文
- Bahasa Indonesia
- Bahasa Melayu
- ไทย
- Tiếng Việt
- हिंदी
Has the US Stopped Surprising Markets With Robust Macro?
Published 02/15/2024, 12:02 PM
Updated 03/21/2024, 07:45 AM
Has the US Stopped Surprising Markets With Robust Macro?
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
Latest comments
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.