US Retail Sales Data Could Indicate Economic Shifts

U.S. Retail Sales Data Could Indicate Economic Shifts

The U.S. Census Bureau will release retail sales m/m today at 12:30 GMT with a forecasted increase of 0.4%. This tracks monthly movements of sales for retail stores throughout the country, so it could be an important read on consumer spending and some aspects of the economy.

If the numbers are better than expectations, it may signal consumer confidence or a new spending impulse, possibly making way for economic growth. The potential will also trigger fears of inflation because higher demand is likely to cause upward price pressures. In case this happens, the Federal Reserve will be compelled to change its monetary policy, and this may affect interest rates in the future.

Conversely, if sales growth is running below the expected mark, it might only indicate that consumer demand is weaker, perhaps due to higher prices or economic uncertainty. This would immediately reduce the inflation concerns and allow the Fed to maintain, or lower interest rates to, even more competitively low levels. The report may also impact the strength of the U.S. dollar. Stronger-than-expected numbers can propel the dollar, while weaker numbers can weigh upon it.

Watch out for today’s EIA US crude oil stocks report

The U.S. Energy Information Administration (EIA) is scheduled to publish its weekly Crude Oil Stocks Change report today at 15:00 GMT, which is expected to come in at 4.224 million barrels and the previous stock was 5.810 million. This tabulating reports on the level of commercial crude oil held by U.S. companies as of week's end, and therefore could impact oil prices.

A higher-than-expected rise in the oil inventories in the report could signal weaker demand; thus, that may lead to downward pressure on the oil prices. Fears of an oversupply of oil may then dampen the confidence of the market in oil. But when the rise in inventories might herald stronger demand and, therefore, an increase in oil prices once supply starts becoming tight.

The outcome is yet unknown, and oil markets are waiting to respond to the actual data relating to expectations.