US Retail Sales, Inflation & Jobs Report Point to Continued Fed Rate Hikes
By US retail sales rose by 3% month over month to $697 billion in January, according to the US Census Bureau.[0] This reading exceeded the market expectation of an increase of 1.8%, and followed December's decrease of 1.1%. Retail Sales ex-Autos increased by 2.3%, above analysts' estimates of +0.8%.[1] Total sales for the November 2022 through January 2023 period were up 6.1% from the same period a year ago, and Retail trade sales were up 2.3% from December 2022, and 3.9% above last year.[1]
The latest reading of the consumer price index showed that inflation rose by 0.5% in January.[2] The CPI increased by 6.4% from a year ago and the Federal Reserve has been hiking interest rates in an effort to cool the economy and ease inflation.[3]
In January, there was the biggest increase in sales since March 2021, and all retail sectors experienced growth.[4] Department stores saw a 17.5% increase, food services and drinking places had a 7.2% increase, and auto dealers saw a 6.4% increase.[4] Not seasonally adjusted, and compared to the same month a year earlier, retail sales in January jumped by 6.7%.[5]
The January US Jobs Report showed 517k jobs created, easily beating forecasts of 185k jobs.[6] This suggests that consumer spending was strong last month and could bolster the Federal Reserve’s resolve to keep raising interest rates in the face of persistent inflation.[7]
Oil continued to barrel lower as the dollar rose and U.S. stockpiles were estimated to have grown.[8] On Wednesday morning, West Texas Intermediate (WTI) crude futures, the U.S. benchmark, decreased by 1%, trading at a rate of approximately $78.[8]
It is important to note that investing comes with risk, so it is important to carefully consider whether trading is appropriate for you based on your personal circumstances.[9] The Fed will look at these figures and see them as supportive of the central bank’s ongoing war against inflation.[6] Presently, it is anticipated that the Federal Reserve will agree to quarter percentage point increases in interest rates at its forthcoming meetings, followed by a period of evaluation to gauge the effect of the monetary policy changes on inflation, the job market, and the economy in general.[10]
0. “U.S. retail sales climb by 3.0% in January By Investing.com” Investing.com, 15 Feb. 2023, https://www.investing.com/news/economic-indicators/us-retail-sales-climb-by-30-in-january-3004176
1. “US: Retail Sales rise by 3% in January vs. 1.8% expected” Forex Factory, 15 Feb. 2023, https://www.forexfactory.com/news/1205804-us-retail-sales-rise-by-3-in-january
2. “Treasury yields rise as investors digest latest retail sales, inflation data” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/us-treasury-yields-investors-digest-latest-inflation-data.html
3. “U.S. Retail Sales Rose Sharply in January” msnNOW, 15 Feb. 2023, https://www.msn.com/en-us/money/markets/us-retail-sales-rose-sharply-in-january/ar-AA17vjgb
4. “Retail sales jumped by 3% in January, the biggest gain in nearly two years” CNN, 15 Feb. 2023, https://www.cnn.com/2023/02/15/economy/retail-sales-january/index.html
5. “Stock Market Today: Stocks Close Up After Strong Retail Sales Data” Kiplinger's Personal Finance, 15 Feb. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-021523-stocks-close-up-after-strong-retail-sales-data
6. “US Retail Sales Beat Expectations, US Dollar (DXY) Continues to Move Higher” DailyFX, 15 Feb. 2023, https://www.dailyfx.com/news/us-retail-sales-beat-expectations-us-dollar-dxy-continues-to-move-higher-20230215.html
7. “US Retail Sales Jump by Most in Nearly Two Years in Broad Gain” Bloomberg, 15 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-15/us-retail-sales-jump-by-most-in-nearly-two-years-in-broad-gain
8. “Stock market news today: Stocks rise after strong retail sales data” AOL, 15 Feb. 2023, https://www.aol.com/stock-market-news-today-stock-130622831.html
9. “Why Wednesday's US retail sales report could be stronger than expected” ForexLive, 14 Feb. 2023, https://www.forexlive.com/news/why-wednesdays-us-retail-sales-report-could-be-stronger-than-expected-20230214/
10. “Retail sales jump 3% in January, smashing expectations despite inflation increase” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/retail-sales-january-2023-.html
