January retail sales in the United States grew at the fastest pace in seven months, which was well above economists’ estimates. According to the Ministry of Commerce on Wednesday, the total sales volume increased by 5.3% against a 1% decline in December. The median estimate of the economists’ survey predicted an increase in retail sales by only 1.1%.
The sharp increase of coronavirus cases led to the population’s spending cuts at the end of the year. But as the U.S. government began to ease some restrictions on business, people were given the opportunity to shop more and visit restaurants. Combined with the latest round of payments in the amount of $600, there has been a significant boost of monthly expenses in various segments of the population.
Retail sales in online stores increased by 11% – the highest figure in two years. The number of workplaces in the food service industry increased by 6.9% as the restrictions on restaurants and bars across the country were lifted. Furniture, electronics, and home appliances stores also showed double-digit growth for the month.
The so-called “control group of goods”, which doesn’t include catering products, car showrooms, building materials stores, and gas stations, increased by 6%, which is the largest increase since June. This is the most important indicator, as it’s correlated to GDP the most.
For the stock market, this data is currently ambiguous. On the one hand, this is positive news. But on the other hand, there is the question of the need to distribute the assistance to the population according to the Joe Biden program.
Against this background, investors have taken a wait-and-see attitude. The stock market is gradually declining and the dollar is rising. 10-year government bonds yield slightly decreased to 1.28%.
Main market quotes:
- S&P 500 (F) 3,917.12 -10.88 (-0.28%)
- Dow Jones 31,613.02 +90.27 (+0.29%)
- DAX 13,927.70 +18.43 (+0.13%)
- FTSE 100 6,706.14 -4.76 (-0.07%)
- USD Index 90.820 -0.129 (-0.14%)
Important events:
- Employment change in Australia (Jan) at 02:30 (GMT+2);
- Minutes publication of ECB Meeting on the monetary policy at 14:30 (GMT+2);
- United States Initial Jobless Claims at 15:30 (GMT+2);
- Philadelphia Fed Manufacturing Index (Feb) at 15:30 (GMT+2);
- US сrude oil reserves at 18:00 (GMT+2).
