Importance: ***

Definition: The retail sales data provides valuable information about consumer spending--the consumption part of the gross domestic product (GDP). Consumption spending accounts for more than one- half of GNP.

 
Related Indicators:

Source: U. S. Commerce Department

Frequency: Monthly

Availability: About two weeks following the reported month

Direction:

Timing:

Volatility: High

Likely Impact on Financial Markets:

        Interest Rates: Larger-than-expected monthly increase or increasing trend is considered
        inflationary, causing bond prices to drop and yields and interest rates to rise.

        Stock Prices:

        Exchange Rates:

Ability to Affect Markets:

Analysis of the Indicator:

Retail sales data represents merchandise sold for cash or credit by retailers. Durable goods, such as
autos, make up 35% of the figure. The balance consists of nondurables, such as gasoline, restaurants,
and general merchandise.

There are several drawbacks to the report. The data covers purchases of goods only, not services. It is
not adjusted for inflation and it is extremely volatile.

The bond market reacts negatively to a strong report.

WEB Links
A Graph of the latest Retail Sales data from The Economic Statistics Briefing Room of the White House

The latest GDP report from BLS.