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What Do February’s US Retail Sales Metrics Indicate?

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US retail sales and core retail sales

The Census Bureau released US retail sales and core retail sales data on Tuesday. In addition to this, a revision of January’s data was also declared.

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Retail sales data

The retail sales data is the key indicator of consumer spending and is indicative of major economic activity in the United States during the reporting period. The retail sales indicate the change in the entire value of sales at the retail level.

According to the data released by the Census Bureau on Tuesday, US retail sales in February dipped 0.1%. The decrease in automobile purchases impacted February’s retail sales. In addition to this, January’s retail sales were revised from a 0.2% gain, as previously reported, to a drop of 0.4%.

Core retail sales data

The core retail sales data indicates the change in the entire value of sales at the retail level excluding automobile sales. The core retail sales data is also one of the prominent indicators of consumer spending. It also indicates the pace of the US economy.

According to the data released by the Census Bureau on March 15, the US core retail sales declined 0.1% in the last month. The core sales data is one of the important elements of the US gross domestic product release. Considering the fact that consumer spending accounts for as much as 70% of US economic growth and that the retail sales data was weak, the impact on US growth is understandable. On Tuesday after the release of the retail sales data, Barclay’s downgraded the US GDP for the first quarter of 2016 from the previously estimated 2.4% to 1.9%.

These economic releases were even more important than usual because of their release on the same day the Fed gathered for a two-day policy meeting. The Fed interest rate decision, which will be out by Wednesday night, will have a considerable impact on base metal prices along with base metal miners like Freeport-McMoRan (FCX), Glencore (GLNCY), Alcoa (AA), BHP Billiton (BHP), and ETFs like the PowerShares DB Base Metals Fund (DBB) and the SPDR S&P Metals & Mining ETF (XME). We’ll discuss the price action of base metals on Tuesday in the following article.

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