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What Do Recent Retail Sales Trends Indicate?

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Recent retail sales numbers and their effect on the market

Retail sales are one of the major economic indicators, not only for the retail sector, but also for the complete US economy. The Census Bureau and the US Department of Commerce report these figures. Retail sales act as a leading indicator of the US economy’s condition. Thus, Wall Street keeps a close eye on this data, as it paints a picture about the sales of retail goods during the period.

A continuous drop in this metric can signal that the industry is slowing down or that manufacturers’ inventories are climbing substantially, which could lead to the other sectors in the market feeling the pinch. This was what happened recently during the sub-prime crisis of 2008.

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After the June figures didn’t meet expectations, investors had a smile on their faces when the July retail sales number increased 0.6% month-over-month, beating the consensus of 0.5%. The retail sales for the month of July were $446.5 billion, which increased 2.4% YoY (year-over-year). Let’s have a look at recent retail sales.

The S&P 500 rose on the news of good retail sales numbers. The consumer and discretionary sector was the highest gainer in terms of the sector. The Consumer Discretionary Select Sector SPDR ETF (XLY) and the SPDR S&P Retail ETF (XRT) increased on the good news. Stocks like Amazon.com (AMZN), Casey’s General Stores (CASY), and Dillard’s (DDS) were some of the gainers.

In the next article, we will have a look at the recent consumer spending trends.

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