US Retail Sales, Inflation & Jobs Report Point to Continued Fed Rate Hikes
US retail sales rose by 3% month over month to $697 billion in January, according to the US Census Bureau. 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%. 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.
The latest reading of the consumer price index showed that inflation rose by 0.5% in January. 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.
In January, there was the biggest increase in sales since March 2021, and all retail sectors experienced growth. 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. Not seasonally adjusted, and compared to the same month a year earlier, retail sales in January jumped by 6.7%.
The January US Jobs Report showed 517k jobs created, easily beating forecasts of 185k jobs. 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.
Oil continued to barrel lower as the dollar rose and U.S. stockpiles were estimated to have grown. On Wednesday morning, West Texas Intermediate (WTI) crude futures, the U.S. benchmark, decreased by 1%, trading at a rate of approximately $78.
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. The Fed will look at these figures and see them as supportive of the central bank’s ongoing war against inflation. 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.
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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
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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
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