Retail Sales Data May Not Prove the End is Near for the Recession
U.S. dollar remains mixed in currency trading
The U.S. dollar remains mixed in currency trading on the FX market as its performance varies depending on the currency paid. Greenback is mixed as economic data supporting major currencies provides a bit of a muddled picture. Included in this picture is economic data coming out of the U.S.
Retail sales data for June showed an improvement that was largely unexpected. GFT’s Kathy Lien reports on why this positive news may not be as good as one might think:
Retail sales rose 0.6 percent in the month of June, the strongest pace of growth since January. However the increase in overall consumer spending masked underlying weakness with sales of core goods which excludes sales of cars rose only 0.3 percent (the sale of cars can be sensitive to discounts by dealers). The unseasonably cool weather in the Northeast left spending on clothing unchanged and unsurprisingly the biggest contributor to consumer spending was gas station receipts.
Indeed, it appears that once the data is broken down, things aren’t as rosy as they might seem at first blush. Consumer spending on what many consider non-essentials remains sluggish. Most people do not consider increased spending on gas as a positive thing with regard to the economy, since it cuts into other consumer spending.
See Also
- Economic Data and FX Trading
Currency trading on the FX market