At 21:30 GMT on November 17, the U.S. retail sales rate for October was released, recording 0.3%, with expectations of 0.5%, and the previous value was revised down from 1.90% to 1.6%.
After the data was released, spot gold moved higher and then stood at the $1890 mark. In addition, U.S. stock index futures were down slightly. Dow futures extended their decline to 0.77%, S&P 500 futures fell 0.68%, and Nasdaq futures narrowed their gain to 0.2%. The yield on the U.S. 10-year Treasury note fell to 0.877% from 0.882%.
In addition, oil prices began to fall after the data came out. wti crude oil futures extended their daily decline to 2% at $40.61/bbl.
Specifically, online retailers saw a surge in sales, but furniture, apparel, and sporting goods sales all saw significant declines. Non-retail sales were up 3.1 percent from the previous month, but retail sales declined 0.4 percent, bar and restaurant revenues declined 0.1 percent, and sporting goods and apparel sales declined 4.2 percent.
Stephen Stanley, chief economist at Amherst Pierpont Securities, stated.
“Consumers have already responded to the impact of the outbreak by increasing spending on goods such as new cars and home gym equipment, while reducing spending on goods and services that require human contact, such as movie theaters, manicures, and air travel.”
Following the data, agency analysis suggests that U.S. retail sales fell short of expectations in October and could slow further due to a spike in new cases of coronary pneumonia and a drop in household income as millions of unemployed Americans lose financial support from the government. Restrictions and consumers avoiding crowded venues such as bars and restaurants could lower spending, triggering another wave of unemployment and further squeezing incomes.
The intensifying second epidemic in the U.S. and the delay in a new round of fiscal stimulus in the U.S. have lowered consumer spending levels for the American people. However, it is worth noting that, according to media reports, since the outbreak of the new coronavirus, U.S. household finances are in the best shape in decades.
In addition, despite the surge in new coronavirus infections, economists expect the U.S. economy to grow at an annualized rate of 4% this quarter, the same as the October forecast, according to a survey by the media. Also, U.S. households’ savings have improved considerably.
The improved financial situation of U.S. households is linked to the Federal Reserve’s ultra-loose policy, which has fueled a continued expansion in refinancing, and mortgage rates have fallen to record lows. The recovery has also been fueled by the fact that households have become much less burdened by debt service and have fully recovered from the financial crisis of 2007-2009.
Ian Shepherdson, chief economist at the Pantheon of Macroeconomics, stated.
“Economic growth expectations are likely to be revised upward further in the coming quarters because U.S. households have large cash deposits waiting to be spent.”
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