US Retail Sales contracted by 0.2% MoM in January
- Retail Sales in the US lost momentum in January.
- US Dollar Index advances marginally to the 99.00 region.
Retail Sales in the United States eased to $733.5 billion, or 0.2%, in January, the US Census Bureau reported on Friday. This print followed the flat reading recorded in the previous month and came in above market expectations for a drop of 0.3%. On a yearly basis, Retail Sales were up 3.2% in this period.
"Retail trade sales were down 0.2% from December 2025, and up 3.0% from last year. Nonstore retailers were up 10.9% from last year, while food service and drinking places were up 3.9% from January 2025," the press release read.
Market reaction
The US Dollar (USD) gives away some gains following the release, although the US Dollar Index (DXY) keeps the bid bias unchanged above the 99.00 barrier.
(This story was corrected on March 6 at 14:56 GMT to say in the first paragraph that the Retail Sales report was released on Friday, not Tuesday.)
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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