Baxia Markets
June 15, 2021

US Consumption Stagnant?

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In a few hours, we have both the US Retail Sales m/m and the US Core Retail Sales m/m releases. Is US consumption on the rise? Or are we hitting a plateau? Set your alarms for 12:30PM GMT time for this crucial release.


What is it? 


The Retail Sales m/m is released by the US Census Bureau. It measures the total receipts of retail stores on a month-to-month basis. Core Retail Sales is the same metric, however, it does not include the sale of automobiles. 


Monthly percent changes reflect the rate of changes of retail sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. 


The Retail Sales numbers are released monthly, about 16 days after the month ends. Why is this release important? Well, it's the primary gauge of consumer spending, which accounts for the majority of overall economic activity. 



What are the Expectations for June Retail Sales?


The expectations for this month's Retail Sales are -0.6%, and the expectation for the Core Retail Sales is 0.4%. This is only the second time this year we are forecasting a negative number for Retail Sales. This is something to take note of. 



Professional Insight


According to CNBC: Kleinhenz said government stimulus has flowed through the economy and into consumers’ wallets. That’s fueled shoppers’ appetite for spending and a quicker-than-expected recovery, he said.


“We are seeing clear signs of a strong and resilient economy,” he said, adding that households “are ready to resume some normalcy of living, working and playing.”



What happens if…


Generally speaking, a high reading is seen as positive (or bullish) for the USD.

If the 'Actual' is greater than 'Forecast' is good for currency; in this case, the economy is working as we expect it to. People are spending money with no fear that something bad in the near future might happen. 


What happens if…


If we see a release that comes out to be lower than what is expected, then that will be considered bearish for the USD. It will mean that people are spending less than what we expected. A sign that the economy is not running at the level expected. 



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