US Retail Sales are Growing and Holiday Sales are Expected to be Strong

In the United States, the driving force behind economic growth is the consumer. Consumer spending accounts for more than 60% of the total growth. Consumer spending is reflected in several different metrics including US retail sales. Retail sales are generally released during the first two weeks of each month. Retail sales are still strong but the most recent data shows that Trump's trade tariffs are beginning to weigh on the US consumer. Despite slowing sales, some anaylsts believe that holiday retail sales will be very robust. You can trade around retail sales by following an economic calendar.

The Consumer is Strong in the US but Sentiment is Slowing

Despite slowing US jobs data, US retail sales rose in August, driven higher by a jump in auto buying and robust online sales. The Commerce Department reported that US retail sales increased 0.4% in August down from 0.8% in July. Excluding autos, retail sales were unchanged for the first time since February. The modest slowdown follows signs that consumer confidence, while still strong, has slipped a bit as the US-China trade war has intensified. 

U.S. businesses have cut back on their investment and expansion plans amid the trade war’s uncertainty and exports have declined. That has left consumers as a key source of growth. Online sales continued to rise climbing 1.6%, roughly the same amount as in July. In addition, the prices that retail consumers are paying are subdued. Most of the retail inflation figures that have been released in the United States over the past few months have been very tame. This will provide cover for the Federal Reserve and allow them to cut rates if needed.

Are Holiday Sales Expected to Rise

The Deloitte annual holiday sales survey points to Holiday retail sales rising for 2019. Deloitte has forecast that holiday retail sales will increase 4.5% to 5%, exceeding $1.1 trillion. That would be better than the Census Bureau data of sales growth of 3.1% on sales of $1.09 trillion from last November to January. A separate forecast by global consulting firm AlixPartners is calling for holiday sales growth of 4.4% to 5.3%. Deloitte has forecast retailers’ digital sales to also be robust this holiday season, amounting to $144 billion to $149 billion. E-commerce sales are expected to grow 14% to 18%, which would be better than growth of 11.2% in 2018.

How Can You Trade Around Retail Sales?

Retail sales are released every month and can be followed on an economic calendar such as the one that is offer by iFOREX broker. An economic calendar is a very useful tool. It describes the schedule for all the important economic releases during a month. Retail sales in the United States is generally released during the second or third week of the month. What is helpful is that the release is placed next to the prior months release as well as the anticipated forecast of the retail sales number. The actual release metrics versus the forecasted release will determine the future movements of many assets.