What it Measures:
- Consumer Durable Goods – typically items which last for a minimum of three years.
- Consumer Non-durable Goods – items that last for less than three years.
The Retail Sales number is thought to reflect the public’s overall purchasing trends, thereby indicating the level of consumer spending.
What effect it has:
Generally, rising Retail Sales is a sign of an economic expansion which is favorable to the U.S. Dollar, so higher-than-expected Retail Sales numbers will tend to boost the Dollar.
A declining trend in the Retail Sales indicator or a lower-than-expected number would tend to indicate the U.S. economy is heading toward recession. This would eventually lead to the Federal Reserve lowering interest rates, which tends to adversely affect the Dollar’s value.
How often it is released:
Released on a monthly basis. Typically around the 14th of the month after the month reviewed at 8:30 am EST.
Why it is important:
Retail Sales figures are an important economic indicator because they give a good general picture of consumer spending. Core Retail Sales, sometimes called “ex-auto” Retail Sales, excludes automobile sales which make up a 20% component of Retail Sales. This figure is more reliable since auto sales tend to be extremely volatile and many fundamental traders prefer to focus on this number instead.
The Retail Sales monthly report also excludes money spent on services, therefore representing only half of total consumption in the economy during the month. Nevertheless, the number is still considered one of the chief fundamental indicators of the economic health of the nation. Retail Sales can therefore have a considerable impact on the currency market if it differs significantly from the market’s consensus expectations.
What's next?
- Visit the Office for National Statistics for last month's Statistical Bulletin & other current reports.
- Read about more indicators.
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