Retail Sales Show Record Decline In October
Retail Sales Show Record Decline In October
Retail Sales (Oct) Actual -2.8%, Expected -2.0%, Previous -1.3% (Revised from -1.2%)
Core Retail Sales (Oct) Actual -2.2%, Expected -1.1%, Previous -0.5% (Revised from -0.6%)
Import Prices (Oct) Actual -4.7%, Expected -4.3%, Previous -3.3% (Revised from -3.0%)
Release Explanation: This report measures the value of sales at the retail level, a very important set of figures that make up a large percentage of the consumer spending numbers. Retail sales are the measure of the total sales of goods and services by retail stores. Retail Sales is an important measure of consumer spending and inflationary pressures. Serviced based economies rely on the strength of the consumer to keep things moving along, this therefore impacts PCE and CPI, the Inflationary reports. A currency will be impacted by this report over time as it reveals the strength of the public in their ability, or desire, to spend. Steady increases in retail sales apply significant inflationary pressures to consumer prices. With retail trade being the foremost indicator for consumer spending, this figure is extremely important in understanding the economy.
Trade Desk Thoughts: Retail sales declined in October by a record 2.8% from September, according to figures released today from the Census Bureau. It was the fourth consecutive month of declines. For the year to October, retail sales fell 4.1%. Retail trade sales were down 3.1% from September 2008 and were 5.0% below last year. Motor vehicle and parts dealer’s sales were down 23.4% from October 2007 and sales of furniture and home furnishings stores sales were down 13.5% from last year.
Sales at food and beverage stores, along with sales at health and personal care stores, were the only categories which saw an increase, rising 0.3% and 0.4% respectively from September.
Sales of all retailers except auto and parts dealers, the so-called core measure, declined 2.2% in October.
In a separate report released from the labor Department, Import Prices slid 4.7% in October, the largest one-month decline since December 1988. For the year to October, import prices were still up by 6.7%. Petroleum import prices fell 16.7% last month, the biggest drop in more than five years, but were higher by 13.1% for the year. Import prices decreased 32.4% over the past quarter, the largest quarterly fall since February 1991. Excluding petroleum, import prices fell just 0.9% and were up 5.0% on the year.
“The weakening job market, along with steep declines in assets like homes and investments, will continue to exert a negative effect on consumption” said Matthew Carniol, chief currency strategist at TheLFB-forex.com. “The danger here is that even if another fiscal stimulus package is passed by the government, consumers may choose to simply save or pay down debt rather than spend.”
Forex Technical Reaction: S&P futures were little changed after the reports were released, and were recently trading about 1.4% lower. The dollar increased against the euro and pound, and then weakened, making little net change.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
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