The USD stopped declining after last week’s crash, following a round of soft economic data, with consumer and producer inflation both cooling off. But
The USD stopped declining after last week’s crash, following a round of soft economic data, with consumer and producer inflation both cooling off. But, the decline has resumed again today, after the release of the retail sales report, which looked soft on the first glance, although it is not too bad.
According to the Commerce Department, retail spending in the United States increased by 0.2% last month. This growth rate was slower than the 0.5% increase seen in May which was expected to remain steady in June as well. It is worth noting that the retail sales figures were adjusted for seasonal variations but not for inflation.
Furniture sales experienced a notable increase of 1.4%, while spending at department stores declined by 2.4% during June. If sales at gasoline stations and on cars and parts are excluded, retail sales still managed a modest rise of 0.3% in June from May. In comparison to the previous year, overall retail sales saw a 1.5% increase in June, marking the second-weakest pace since May 2020.
These numbers provide evidence that US consumers are still willing to spend despite higher interest rates, persistent inflation which is cooling off actually, economic uncertainty etc. However, the report suggests that retail spending only experienced minimal growth during last month.
Economists have noted that consumer spending is affected by the depletion of excess savings that were accumulated during the Covid-19 pandemic. Savings are being used less, declining from $90 billion per month last summer to $70 billion per month in May. Additionally, the resumption of student loan repayments from September is expected to further impact consumer spending negatively.
Retail sales account for 2/3rds of the US economic output although despite the challenges, consumer spending likely remained stable in the second quarter, albeit at a slower pace compared to the first three months of the year. Nonetheless, the USD has tumbled lower. GOLD has surged above $1,980 and is looking at $2,000, EUR/USD remains steady above 1.12 while USD/JPY fell below 138 earlier. Stock markets also received a boost as bad news from the US, now is still good news for risk sentiment since it means no more hikes from the FED after this month.
US June 2023 Retail Sales Report
US retail sales for June rises 0.2%
- June retail sales 0.2% versus 0.5% expected
- May sales were 0.3% revised higher to 0.5%
Details:
- Retail sales MoM 0.2% versus 0.5% expected
- Ex Autos 0.2% versus 0.3% expected.
- Prior ex autos 0.1% revised higher to 0.3%
- Control group 0.6% versus 0.3% expected.
- Prior control group 0.2% revised higher to 0.3%
- Retail sales ex gas and Autos 0.3%. Prior month revised from 0.4% higher to 0.5%
- retail sales came in at 689.5 billion
The control group came and higher at 0.6%, but the headline number was lower
GOLD
www.fxleaders.com