With confidence and employment at such high levels, US consumers are clearly happy to spend, offering hope for a 3% GDP figure for 3Q17, according to James Knightley, Chief International Economist at ING.
Key Quotes
“Yesterday’s US retail sales figures for July were very good, rising 0.6%MoM in July versus the consensus 0.3% forecast. There were also big upward revisions from -0.2%MoM to +0.3%MoM for June. There were broad based gains with 10 of the 13 broad retail categories reporting rising sales. This suggests the household sector is strong and in our view bodes well for a 3% GDP figure for 3Q17 growth. With consumer confidence at firm levels, employment continuing to rise and wages showing some evidence of picking up we remain optimistic on the prospects for consumer spending.”
“The details of the report show that gasoline sales were a drag (-0.4%) due to lower prices and with this category excluded sales were up 0.7%. There were strong performances from motor vehicles and building materials (both up 1.2%) with internet, department stores and miscellaneous stores also performing strongly. The only areas of disappointment were electronics (-0.5%) and clothing (-0.3%).”
“Markets continue to focus on current low inflation rates, but with the labour market tightening and the growth story looking okay the prevailing view within the Fed is likely to remain that low inflation is merely "transient". We think inflation will be back at the 2% target by the end of the year and also predict a December Fed rate hike. We continue to expect two more 25bp hikes next year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains above 1.0700 amid expectations of Fed refraining from further rate hikes
EUR/USD continues to gain ground on Thursday as the prevailing positive sentiment in the market provides support for risk-sensitive currencies like the Euro. This improved risk appetite could be attributed to dovish remarks from Federal Reserve Chairman Jerome Powell on Wednesday.
GBP/USD gains traction above 1.2500, Fed keeps rates steady
GBP/USD gains traction near 1.2535 during the early Thursday. The uptick of the major pair is supported by the sharp decline of the US Dollar after the US Federal Reserve left its interest rate unchanged.
Gold needs to reclaim $2,340 for a sustained recovery
Gold price is consolidating Wednesday’s rebound in Asian trading on Thursday, as buyers await more employment and wage inflation data from the United States for fresh trading impetus. Traders also digest the US Federal Reserve interest rate decision and Chair Jerome Powell's words delivered late Wednesday.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Fed meeting: The hawkish pivot that never was, and the massive surge in the Yen
The Fed’s latest meeting is over, and the tone was more dovish than expected, but that is because the rate hike hype in the US was over-egged, and rate cut hopes had been pared back too far in recent weeks.