As the US Dollar dips on the current market trends, investors should not panic. The trend is simply a correction that occurs after the initial downturn following a trading strategy. So long as the USD trend can be maintained and managed, investors will continue to make profitable trades.
Do you realize that retail sales data released by the US Bureau of Labor Statistics was also the first to receive a lower print. The biggest effect of this drop is on the retail industry. Sales are expected to fall a bit more this year, but the economic data is still good and will likely hold up well over the next couple of years.
The US Bureau of Labor Statistics released retail sales data that showed retail sales falling for the first time in two years. The retail sales figures for June were actually higher than expected. If retail sales continue to rise, the Federal Reserve may be forced to raise rates to stop the falling dollar.
This retail sales report shows how important it is to pay attention to the retail sales numbers that are released every month. It’s easy to lose sight of the big picture. For example, the rise in gasoline prices may not affect the retail industry as much as the drop in retail sales data.
The retail sales data will impact you more if you own a business that sells goods or services. After all, retail sales are the lifeline of the economy. A strong retail sales report means that you are doing well.
A recent study by the Office of Management and Budget shows that sales by private businesses increased at a faster rate in June than they did in May. A slowdown in retail sales reports from the International Monetary Fund was blamed for the dramatic drop in retail sales reports. There are many reasons for this slowdown, including Europe’s debt problems, US unemployment, and China’s stock market.
The office of management and budget could not say why retail sales fell. They did say that many Americans are also suffering with rising gasoline prices and fears over the slowing Chinese economy. Consumers were also upset that the Federal Reserve is expected to raise interest rates for the first time in more than seven years.
The retail sales numbers will be very important for the US consumer, because they are directly tied to the strength of the economy. If the US economy grows quickly, consumer spending will rise, bringing down retail sales. If consumers don’t have money to spend, retailers will suffer.
One reason the retail sales are falling is due to price inflation. The Consumer Price Index (CPI) reported that prices for gas and food rose last month. It appears that people are facing an increased cost of living.
All of the economic data are being analyzed by the Federal Reserve and they will decide whether to raise rates in September. Lowering interest rates can help consumers who don’t want to spend more for gas.
Retail sales data can influence the Fed’s next move. If the market continues to decline and the government does not take action, retail sales data could be the deciding factor for the Fed.
Retail sales are important to help the government maintain its deficit spending and to keep unemployment low. Ifthe retail sales do not return to the high levels seen during the boom years, the government will be forced to slash its deficit spending even further.