Business

U.S. Retail Sales Drop With Softer Consumer Spending

Retail sales have gone down again this month. The auto sector and building material sales have dropped with a decrease in consumer spending.

Last month sales saw an increase of 1.7 percent and now it is at a decline of 0.2 percent according to the Commerce Department on Wednesday. However, Stephen Stanley the chief economist from Amherst Pierpont Securities says that there may be a strong bounce back for the month of May.

Retail sales data is one of the crucial indications for consumer spending and economic activity, making it a closely-watched data.

Though the economy has shown robust growth at 3.2 percent during the first quarter, the retail sales have gone done for the second time, over a time span of three months. Motor vehicles sales have been worst hit, according to the government data.

Meanwhile, the Trump administration has been putting pressure on the Federal Reserve to cut down on interest rates to give a boost to the economy.

If the trade war further impacts the economy, the Fed chairman will have to consider lowering interest rates. Now, traders expect the Fed to reduce interest rates by two quarter-points by the end of 2020.

The automobile sale has come down by 1.1 percent. However, it was up the previous month by 3.2 percent. Unit sales have touched the lowest levels since 2017, according to the Industrial data reported from the Wards Automotive Group.

If President Trump continues to increase tariffs by 25 percent on the remaining goods imported from China, this will further worsen the scenario, as the U.S. will have to bear higher prices, which will again affect consumer goods.

The major sectors that have been affected in the retail category are clothing, personal care, health, and electronic appliances.

Meanwhile, Treasuries have rallied again after the retail sale data release. The 2-year yield has touched 2.4 percent, which is a 15-month low.

Tags

Michael Perez

Michael interacts and expresses his thoughts in a quite interesting manner. So, he has been appointed for the post of Content Manager and Editor. He is a very knowledgeable person with around five years of previous experience as a Business Analyst in a well-established business. His concepts related to business, finance, accounts, and politics are on finger-tips. In spare time, he generally satisfy his knowledge craving by reading business-related magazines and press releases published by the organizations,

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close