{"id":22821,"date":"2023-06-15T02:23:10","date_gmt":"2023-06-15T06:23:10","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/may-retail-sales-data-arrive-today-a-drop-would-be-good-for-the-fed\/"},"modified":"2023-06-15T02:23:11","modified_gmt":"2023-06-15T06:23:11","slug":"may-retail-sales-data-arrive-today-a-drop-would-be-good-for-the-fed","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=22821","title":{"rendered":"May Retail Sales Data Arrive Today. A Drop Would Be Good for the Fed."},"content":{"rendered":"
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<\/p>\n
<\/p>\n<\/figure><\/div>\n

April showers brought May flowers\u2014but they probably didn\u2019t bring about much shopping for flowers. <\/p>\n

Retail sales likely contracted in May, reversing April\u2019s 0.4% uptick, which had been the first increase since January. Economists polled by FactSet estimate that May\u2019s retail sales report\u2014due Thursday morning\u2014will show a 0.2% month-over-month decrease. <\/p>\n

\n

According to Cowen, foot traffic into retailers decelerated in May. Traffic was up 5.5% year-over-year in May, down from January\u2019s 44.9% increase and marking a new low for 2023. And
\n Citi
\n \u2018s credit card data backs it up. Select retail spending on Citi credit cards fell by about 0.3% month over month, driven by drops in spending on auto retail, apparel, and restaurants. <\/p>\n

While the retail sales report always draws market attention, May\u2019s data will be scrutinized even further for any \u201cgreen shoots,\u201d given that \u201cthe consumer is the only hope for a U.S. economic recovery,\u201d wrote Louis Navellier, chief investment officer of Navellier. <\/p>\n

And indeed, it isn\u2019t all doom and gloom for retail sales. Stripping out fluctuations in gas and auto prices, retail sales are actually expected to rise 0.4%, according to FactSet. <\/p>\n

\u201cGas spending dropped substantially, partly due to lower gas prices,\u201d wrote
\n BofA
\n economist Aditya Bhave in a note to clients. <\/p>\n

Bhave notes that the bank\u2019s proprietary credit card data indicated that spending on \u201cbig ticket\u201d services\u2014such as travel or other experiences\u2014remains fairly strong, even as spending on big ticket items\u2014such as furniture or electronics\u2014has gone down. <\/p>\n

\u201cThe bottom line is that consumers have rotated their major purchases from goods to services, instead of pulling back on such spending altogether,\u201d he wrote. \u201cIn our view, this is a sign of consumer health.\u201d<\/p>\n

While signs that consumers are pulling back bode poorly for retailers and other consumer-facing industries, it would likely be received well by the Federal Reserve. The central bank has been raising interest rates for over a year in a bid to stifle consumer demand and tame inflation. The efforts seem to be working\u2014but there\u2019s still work ahead for the Fed. <\/p>\n

Headline inflation grew by 4% in May, down from April\u2019s 4.9% increase but still well above the Fed\u2019s 2% target. <\/p>\n

On Wednesday, Fed officials chose to hold the benchmark interest rate steady, marking the first time in 15 months that the central bank skipped a rate increase. Fed Chair Jerome Powell indicated the central bank has largely written off cutting rates anytime this year and is still considering increasing rates further if necessary. <\/p>\n

\u201cInflation has not really moved down\u2014it has not so far reacted much to our existing rate hikes,\u201d Powell said in remarks on Wednesday.<\/p>\n

Write to Sabrina Escobar at sabrina.escobar@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

April showers brought May flowers\u2014but they probably didn\u2019t bring about much shopping for flowers. Retail sales likely contracted in May, reversing April\u2019s 0.4% uptick, which had been the first increase since January. Economists polled by FactSet estimate that May\u2019s retail sales report\u2014due Thursday morning\u2014will show a 0.2% month-over-month decrease. According to Cowen, foot traffic into […]<\/p>\n","protected":false},"author":1,"featured_media":22822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-22821","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nMay Retail Sales Data Arrive Today. 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