Us Retail Sales Down

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Us Retail Sales Down

US Retail Sales Down By 0.8% During January 2024

The speed of decline in the US retail sales was more than the forecasts made by experts. Retail sales declined by -0.8% against the forecast of -0.1%. As for what led to a result like this, experts cite the declines seen in gasoline stations and auto dealerships.

Another factor that weighed heavily on the retail sales was the winter storms. December's retail sales data was also revised lower with a new value of +0.4% against the earlier one of +0.6%.

Retail Sales Go From +0.4% To -0.8%

This means retail sales have gone from +0.4% in December to -0.8% in January, almost twice the gains from the last month.

Since the economists were only pricing in a decline of -0.1%, this reading has surprised everyone. However, many experts point out that if we look at retail sales from an unadjusted point of view, it is only natural to see a decline.

It is common for retail sales to decline in January, as December usually leads to a good jump, mainly due to discounts.

Meanwhile, the labour department data shows that initial claims have decreased by -8000 during the last week. This data signifies an improvement in the US labour market.

Now, the US firms are not reluctant to let go of workers as they had difficulty filling the spots post-COVID.

If we look at the retail sales, excluding building materials, cars, and gasoline, the decline in January was 0.4%. Core retail sales are more accurate and closely linked to the GDP.

With big economies like the UK and Japan slipping into recession, the landscape has become difficult for the Federal Reserve. The Fed now has more reason to let go of its rate hike cycle and turn towards rate cuts if it also wants to avoid recession in the country.

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