U.S Retailers Post their Strongest Sales Growth for 2017

  • U.S Retail Sales Jumped +0.6% in July
  • U.S Jul Retail Sales (ex Auto) +0.5% m/m
  • U.S Jun Retail Sales and Ex-Autos Revised to +0.1%
  • U.S retailers posted their strongest sales growth all year in July. Sales at retailers and restaurants jumped +0.6% from a month earlier, the biggest increase in eight months.

    Ex-autos, retail sales rose +0.5% m/m. The market had been expecting a +0.4% jump in both categories.

    Today’s report emphasizes financial stability and rising confidence of the U.S consumer, who are benefiting from a number of factors – a prosperous stock market, low inflation, strong job growth and slow-but-steady wage gains.

    Digging deeper, Internet sales drove last month’s increase, with spending at non-store retailers growing +1.3% (up +11.5% y/y) the most since last December.

    Note: Amazon’s Prime Day, a popular day of discounts at the site was a big supporter.

    Car sales jumped +1.2%, as did spending on building materials and garden equipment. Sales at furniture outlets, grocery stores, restaurants and department stores all rose healthily.

    In contrast, spending on gasoline, electronics and clothing all fell. Overall retail sales have climbed +4.2% over the past year.

    Other U.S data showed that weak import prices point to persistently low inflation

    The U.S inflation picture does not look much stronger after today’s report on import prices.

    Import prices climbed +0.1% in July m/m and it was entirely due to higher fuel prices.

    Prices for non-fuel imports fell -0.1%, dropping for the first time in seven months and matching the biggest drop in 13-months.

    Today’s report is the latest to show that U.S inflation pressures remain subdued, having weakened from earlier in the year.

    Don’t expect the odds for a Fed Dec. hike to tighten that much after this morning’s print – current odds heading into this morning’s reports were +42% for a Dec. hike.

    USD finds a bid against G7 pairs (€1.1704, £1.2855, ¥110.75 and C$1.2788). U.S treasuries extend todays losses, backing up a further +2 bps to +2.275%.

    This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell