USD Extends Gains on Retail Sales Data

Ashley Carr
August 17, 2017

IBGE economist Isabella Nunes said lower interest rates drove a 13 percent decline in average household credit costs, spurring purchases of durable goods such as hardware and home appliances.

Retail sales alone increased 4.3% from a year ago, with the largest gain again coming from non-store retailers - primarily by e-commerce and catalog businesses with sales up 11.5% from July 2016. Retail-control group sales, which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials stores and gasoline stations, increased 0.6% following a 0.1% gain.

Retail sales in July were also buoyed by a 1.2 per cent jump in receipts at building material stores.

The strong auto sales came despite industry reports which showed vehicle and truck sales fell six per cent from July 2016.

Retail sales have been very underwhelming this year which has contributed to the view that the economy isn't ready for another rate hike this year.

"American shoppers flocked to the malls and even department stores in July, suggesting consumers are well-positioned to propel the economy forward in the second half of the year", said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "We have yet to see the full effect of back-to-school spending, but pickup in spending was evident both online and in general merchandise, which includes bricks-and-mortar department stores".

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The print for June was originally pegged at a 0.1% dip on the month.

The index of business activity rose to a three-year high of 25.2, a striking gain on July's 9.8 and well clear of the consensus estimate of 10.

Amazon's Prime Day helped boost US retail sales in July.

However, cheap gasoline and falling sales of electronics and clothing items still weighed on sales last month.

Furniture and home furnishings stores outperformed the broader retail sector with a 5.6% jump in sales over the same month past year, according to the latest government report.

Other reports by My Hot News

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