The retail sales number is released at 8:30 am on or around the 13th of
each month, and is an estimate of the sales of goods by all retail
establishments in the United States. These goods fall into the personal
consumption expenditures category, which as we discussed in our lesson
on GDP, makes up over 65% of the US Economy. Although the number does
not include anywhere near the data that is included in GDP, since this
number is released for each month (where GDP is released for each
quarter) it is closely watched by the Fed and other market participants
as a timelier indicator of what is happening with the consumer.
In addition to the widely reported headline number, the report that is
issued along with the retail sales number includes a breakdown of retail
sales growth by category. With this in mind the report is not only a
good indicator of overall consumer activity, but also for how different
parts of the economy such as automobile, restaurant, clothing and
electronics sales are fairing. If you are trading the stock of a company
which sells products related to one of the categories reported in the
retail sales release, then it is obviously important to understand that
what happens with the growth of that category is most likely going to
have a direct affect on the price of the stock that you are trading.
