Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

August Retail Sales Rose, Erasing Fears of Stagflation

Stock MarketsSep 16, 2021 04:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. August Retail Sales Rose, Erasing Fears of Stagflation

Strong August retail sales released on Thursday erased fears of stagflation on Wall Street, as American consumers shook off Delta variant concerns.

According to the U.S. Census Bureau, sales at the nation's retailers and restaurants rose at a monthly rate of 0.7% in August of 2021, beating market expectations of a 0.8% decline.

Moreover, excluding volatile auto sales, retail sales rose by 1.8%, well ahead of the 0.1% markets have expected. These numbers confirmed a significant turnaround from July when retail sales dropped 1.8%, easing concerns of the U.S. economy heading into stagflation. That's a situation of higher inflation combined with lower economic growth.

Most of the sales gains were in nonstore retailers (5.3%), followed by furniture (3.7%), general merchandise stores (3.5%), food and beverages stores (1.8%), and building materials (0.9%).

However, the impact of these gains on overall sales was moderated by losses elsewhere like motor vehicle and parts, and sporting goods, sectors most affected by supply chain bottlenecks.

August retail sales were helped by generous unemployment benefits and pent-up savings during the pandemic, which put more money into the hands of American households.

The trouble is that pandemic unemployment benefits are ending in September, while pandemic savings will eventually be depleted, raising doubts about whether retail sales will continue to grow at the same pace in the months to come.

Thus, the tapering of trader and investor enthusiasm in buying equities. Major averages headed south after trading opened on Thursday, with declines accelerating in late-morning trade. At 11.30 a.m., the Dow Jones was down 0.6%, the S&P 500 0.7%, and the tech-heavy Nasdaq 0.65%.

Elsewhere in the economy, a labor market report showed that the number of Americans filing new unemployment claims rose to 332,000 in the week ending September 11, from a pandemic low of 312,000 in the previous week.

The weakening of the labor market further tapered Wall Street's enthusiasm for the vital August retail sales, adding to selling pressure. It further eased pressure on U.S. Treasury bonds, which sold moderately in morning trade. At 11:30 a.m., the benchmark 10-year Treasury bond was trading with a yield of 1.33%, up 2.07% from Wednesday's closings (higher bond yields mean lower bond prices).

Still, investors shouldn't make too much of the connection between Thursday's economic news, and action on Wall Street. The decline in major equity indexes might well be profit-taking, following solid gains in yesterday's trading session.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

August Retail Sales Rose, Erasing Fears of Stagflation
 

Related Articles

Wall Street rebounds after virus-related sell-off
Wall Street rebounds after virus-related sell-off By Reuters - Nov 29, 2021 19

By Sinéad Carew and Kevin Buckland (Reuters) - Wall Street stocks closed higher on Monday, regaining some of the ground they lost in Friday's sell-off, as investors were hopeful...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email