US Retail Sales Preview: USD remains hostage to stimulus negotiation in Washington
|US Retail Sales figures for September are set to show moderate rises after August's statistics fell short of estimates. The previous release triggered accelerated talks on Capitol Hill but the limited timetable implies low chances of a deal. Nevertheless, consumption is key to the US economy, FXStreet’s Analyst Joseph Trevisani reports. US Dollar Index eases from tops just below 94.00 ahead of data.
Key quotes
“The GDP component Retail Sales Control Group is forecast to climb 0.2% in September following August's surprise drop of 0.1%. It had been predicted to rise by 0.5%. Sales ex-autos is projected to add 0.5% in September after rising 0.7% in August. Retail Sales and the GDP component Control Group averaged increases of 0.87% and 1.28% monthly for the six months from March to August.”
“With 11 million workers unemployed, according to the payroll accounting, and far more working part-time and represented by the 12.8% underemployment rate, with jobless benefits for many set to expire and Congress unable to agree on a new stimulus and spending package, it may be only a matter of time before unemployment begins to curtail consumer spending.”
“Markets remain fixated on the Congressional negotiations, selling and buying the safety trade in the greenback and largely ignoring economic data. Despite COVID-19, lockdowns, record layoffs and rehires and a bitter election the consumer remains the central fact of the US economy. It Retail Sales misses or beats its estimate traders will quickly remember.”
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