Article by ForexTime

US retail sales clocked in another underwhelming month of growth in September, according to figures released from the Commerce Department on Wednesday.

Headline sales edged up 0.1 per cent last month from August, compared to market expectations for a 0.2 per cent increase. There was a downward revision to the previous month’s figures.

The so-called ‘control group’ measure – that strips out petrol, food and building related purchases, fell 0.1 per cent, compared to the 0.3 per cent rise the market was expecting.

While traders have been increasingly discounting the odds of an October lift-off following weak US jobs data earlier this month, Wednesday’s retail sales data will do little to bolster the case for the Federal Reserve to raise rates this year.

Here are some comments from economists on the data:

Paul Ashworth, economist at Capital Economics, said:

The softness of September’s retail sales figures supports our view that the Fed probably isn’t going to hike interest rates until early next year.

Dan Greenhaus, strategist at BTIG, said:

The main takeaway from this report is to both reinforce the view that a rate hike in October is a 0% probability event while also providing fodder for those arguing the economy noticeably downshifted in the third quarter.
Ian Shepherdson, an economist at Pantheon Macroeconomics, pointed to some significant caveats when interpreting the retail sales numbers:

First, these data are nominal, and the strong dollar is pushing down the prices of imported goods, especially clothing and electronics. Real sales are performing much better.

Second, retail sales capture less than half of all consumption, and these data tell us nothing about the extent to which people are spending the windfall from falling gas prices on services rather than stuff.

Article by ForexTime

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