Retail Sales: A Slightly Disappointing Dip, but There’s Room for Hope
When the latest numbers hit the market, the takeaway was simple: retail sales rose by 0.2% this month. That’s a modest bump, falling short of the 0.6% uplift pundits were hoping for.
What the Numbers Say
- Retail sales +0.2% month‑on‑month (vs. +0.6% expected)
- Retail sales ex‑autos +0.3%
- Retail sales ex‑gas/autos +0.5%
Expert Take: Jonathan Moyes Breaks It Down
Jonathan Moyes, Head of Investment Research at Wealth Club had a clear view on what’s up:
“US trade policy has dominated the news and had an unsettling effect on global financial markets.
With sentiment so poor, investors were hoping the mighty US consumer provides reassurance.
They didn’t find it—retail sales came in lower than expected, so the consumer vibe is getting a bit peaky.”
Why It Matters for the Fed
What does this mean for the Federal Reserve? Moyes says:
“It’s a tight spot. Hard data looks weak; forward‑looking gauges like consumer and business confidence are down.
In the short term, trade tariffs will likely fuel inflation.
The big question: Is the data now weak enough to trigger another rate cut?
The bond market’s day‑to‑day reaction suggests it’s not yet.”
Takeaway
In short, retail sales are a little lower than we’d like, but not disastrously low. The Fed faces the challenging choice of balancing frictions from trade with the risk of cooling consumer confidence. Meanwhile, the bond market remains a good indicator of the “feel” among investors.
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