Weak Retail Sales Means Fed Tapering Later vs. Sooner
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
U.S. retail sales rose 0.4% in June and just 0.1% excluding autos, with both measures well below consensus estimates. The report raises new questions about the strength of the U.S. economy, the health of consumers and the timing of any Federal Reserve ‘tapering.’
First and foremost, the data provide further evidence the U.S. economy wasn’t growing very fast in the second quarter with “a very real possibility that Q2 GDP will be less than 1%” when the next revision is posted on July 31, writes Dan Greenhaus, chief global strategist at BTIG. “The number one takeaway from today’s report is that the consumer was a bit weaker than expected in the second quarter.”
In the above video, I discuss today’s retail sales report with Breakout’s Jeff Macke, who notes reports of the death of U.S. consumers are always premature.
“I wouldn’t write off the consumer in the U.S. ever,” Macke says. “You know the consumer will come back. If things were really falling off a cliff, I wouldn’t expect Costco’s (COST) numbers to be so good” or for The Gap (GPS) to continue to outperform.
By the same token, Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, declares “the consumer is probably in better shape than today’s report suggests,” citing the strength in auto sales as reported by the automakers. “Consumers bought a lot of cars in June, the actual number being 15.9 million,” he writes. “That’s got to mean something.”
read more ...