June Retail Sales at 1% v/s .8% Expected, May Revised Higher

[MongiIG]

Jul 15, 2022 | DailyFX
James Stanley, Senior Strategist

TALKING POINTS:

• This morning brings the release of US retail sales data for the month of June.
• The retail sales report is usually the earliest look that investors get at retail behavior for the most recently completed month and, as such, there can be considerable attention to this data point as it may be an early sign of trends.
• Last month’s .3% contraction caught many by surprise, but this month’s 1% print was coupled with a revision for last month, up to -.1%, further illustrating the power of the US consumer even in an environment of tighter monetary conditions.

The US consumer remains strong as indicated by this morning’s release of US retail sales data for the month of June. That data point came in at 1% versus an expectation for .8%. And last month’s -.3% that caught so many by surprise was revised up to -.1%.

This does a couple of things, key of which is it broke the trend of falling retail sales data that had shown since January. And with this being such an early look, this is likely a factor that the Fed would consider when evaluating rate hikes. With the US consumer absorbing higher prices and continuing to spend, this could keep the track on a more-aggressive track than had we seen a continued fall in retail sales.

US RETAIL SALES SINCE JUNE, 2021

Chart prepared by James Stanley

The immediate response to the data was a show of strength in equities. The S&P 500 put in a breakout to run to a fresh near-term high, testing a massive zone of resistance that runs from 3802-3830.

S&P 500 15-MINUTE CHART

Chart prepared by James Stanley; S&P 500 on Tradingview