Despite slight growth in October retail sales, economic data shows a stronger-than-expected U.S. economy. This could lead the Federal Reserve to maintain its cautious policy on interest rates in the short term.
October retail sales grew from the previous month, reflecting the continued resilience of the American consumer.
Retail sales rose 0.4% in October. Economists expected an increase of 0.3%, according to Bloomberg data. Meanwhile, September retail sales were revised up, recording a 0.8% increase versus a previous reading that showed a 0.4% increase in that month, according to Census Bureau data.
Auto sales drove most of the gains in the October data, with that sector up 1.6%. October sales, excluding cars and gas, rose just 0.1%, missing consensus estimates of a 0.3% increase. The control group in Tuesday’s report, which excludes several volatile categories and is included in the quarter’s gross domestic product calculation, declined 0.1% in October, below estimates for a 0.3% increase. .
However, both categories saw large revisions in September sales. Reviews showed that sales in both groups increased by 1.2% in Septembercompared to a previous reading of 0.7% growth.
The “momentum” of the report
The report comes as investors continue to closely monitor the health of the U.S. economy as the Federal Reserve eases its restrictive interest rate policy. So far, economic data has been mostly better than expected, which is a good sign for investors as markets accept that the Federal Reserve may not cut rates as quickly as initially expected.
Inflation in the United States
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In prepared remarks Thursday, Federal Reserve Chairman Jerome Powell said that “the economy is not sending signals that we should rush to lower rates.” Powell added: “The strength we are currently seeing in the economy gives us the ability to approach our decisions with caution“.
Friday’s data also concludes a busy week of economic news.
Earlier this week, two reports showed that price increases made little progress toward the inflation target of the 2% from the Federal Reserve in the month of October. Although reports have sparked debate about how much the Fed will cut interest rates in 2025, for now traders still expect the Fed to cut rates once again by the end of 2024.
As of Friday morning, markets were assigning almost a 60% chance that the Federal Reserve cut interest rates in 25 basis points at its next meeting on December 18, according to the CME FedWatch tool.
Source: Ambito
I’m a recent graduate of the University of Missouri with a degree in journalism. I started working as a news reporter for 24 Hours World about two years ago, and I’ve been writing articles ever since. My main focus is automotive news, but I’ve also written about politics, lifestyle, and entertainment.
