https://www.fapjunk.com https://pornohit.net london escort london escorts buy instagram followers buy tiktok followers
Tuesday, February 20, 2024

Strong US retail sales underscore economy’s momentum heading into 2024

Must read

Magnificent Seven Stocks To Buy And Watch: Nvidia, Tesla Slide

Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023...

Stock Market Today: Dow Jones Falls After Home Depot, Walmart Earnings; Nvidia, SMCI Dive

The Dow Jones Industrial Average dropped Tuesday, as Wall Street reacted to earnings reports from index components Home Depot (HD) and Walmart (WMT)....

Nvidia Weighs on Tech Stocks Ahead of Earnings

Live Coverage FeedNvidia Weighs on Tech Stocks Ahead of EarningsNvidia stock was on track for its worst day since last May on Tuesday ahead...

Super Micro Computer Stock Could Hit $1300, Analyst Says. Here’s Why.

Please enable JS and disable any ad blocker

Strong US retail sales underscore economy's momentum heading into 2024 © Reuters. FILE PHOTO: An Abercrombie & Fitch storefront sign states “SALE UP TO 50% OFF” at the King of Prussia Mall, United States’ largest retail shopping space, in King of Prussia, Pennsylvania, U.S., December 8, 2018. REUTERS/Mark Makela/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales rose more than expected in December, boosted by an increase in motor vehicle and online purchases, keeping the economy on solid ground heading into the new year.

The upbeat report from the Commerce Department on Wednesday, which prompted economists to upgrade their economic growth estimates for the fourth quarter, cast further doubt on financial market expectations that the Federal Reserve would start cutting interest rates in March.

It followed news earlier this month of strong employment and wage gains in December as well as a pickup in consumer prices. Fed Governor Christopher Waller on Tuesday described the economy as “doing well,” which he said was giving the U.S. central bank “the flexibility to move carefully and methodically” on monetary policy.

“The economy is still flying high enough and economists can take down those recession forecasts this year,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “For Fed officials, the economy is not too hot and not too cold, but it is just right perhaps for a few interest rate cuts in 2024.” 

Retail sales rose 0.6% last month after an unrevised 0.3% gain in November, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast retail sales would gain 0.4%. Retail sales are mostly goods and are not adjusted for inflation. Sales increased 5.6% on a year-on-year basis in December.

Sales were likely partially boosted by difficulties adjusting the data for seasonal fluctuations following distortions during the COVID-19 pandemic. In the last couple of years, consumers started their holiday shopping early to avoid empty shelves.

“We recommend averaging the December and January retail sales data, or averaging over the November to February period, to get a more reliable read on the state of the consumer,” said Aditya Bhave, senior U.S. economist at Bank of America Securities in New York.

Nonetheless, households have maintained a healthy pace of spending, thanks to the labor market’s resilience. Retailers also have offered discounts to lure holiday shoppers.

Online sales advanced 1.5%. Shopping has moved to online vendors and away from the traditional brick-and-mortar retailers, a trend that accelerated during the pandemic. Receipts at motor vehicles and parts dealers accelerated 1.1% as more stock became available after strikes ended in the fall.

Sales at building material and garden equipment outlets rose 0.4%. Receipts at sporting goods, hobby, musical instrument and book stores gained 0.3%. Clothing store sales jumped 1.5%.

Sales at food services and drinking places, the only services component in the report, were unchanged. That could be a potential red flag as economists view dining out as a key indicator of household finances. The unchanged reading, however, followed a 1.7% surge in November. December was also a very wet month, which could have lowered traffic to restaurants and bars.

Sales at electronics and appliance outlets fell as did those at furniture stores, likely the result of discounting. Gasoline station receipts dropped 1.3% as gasoline prices declined.

Financial markets pared back the odds of a Fed rate cut in March to roughly 53% from about 65% late on Tuesday, according to CME Group’s (NASDAQ:) FedWatch Tool.

Stocks on Wall Street were trading lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

STRONG CORE SALES

Though low-income households are believed to have exhausted excess savings accumulated during the pandemic and debt levels are rising, economists expect consumer spending to hold up this year as long as the labor market does not weaken considerably.

A nearly $80 billion bipartisan deal under consideration in Congress that could expand the child tax credit and boost the low-income housing tax credit through 2025 is also seen underpinning spending.

“There is the possibility we’ll see some level of pullback in consumer spending in 2024 as consumers reevaluate their budgets and pay down some elevated debt levels,” said Mike Graziano, a senior consumer products analyst at RSM US. “However, even if that is the case, consumers are on solid footing entering 2024.” 

Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.8% last month. The so-called core retail sales measure corresponds most closely with the consumer spending component of GDP.

Core sales for November were revised higher to show them rising 0.5% instead of the previously reported 0.4%.

Even with details on spending on services still pending, economists believe consumer spending, which accounts for more than two-thirds of U.S. economic activity, likely increased at about a 2.7% annualized rate in the fourth quarter. That was up from the pace of around 2.0% that most estimated before the report, but below the third quarter’s 3.1% rate.

The Atlanta Fed raised its growth estimate for gross domestic product in the fourth quarter to a 2.4% rate from a 2.2% pace. The economy grew at a 4.9% pace in the third quarter. The government is due to publish its first estimate of GDP growth for the October-December period next Thursday.

Some of the anticipated slowdown in GDP growth will likely reflect smaller inventory accumulation relative to the third quarter’s size. A separate report from the Census Bureau on Wednesday showed business inventories declined for a second straight month in November.

With the Fed expected to start cutting rates this year, most economists are confident the economy will avoid a downturn. The U.S. central bank has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range since March 2022.

Though strong demand for goods is not boosting manufacturing, economists expected lower borrowing costs to provide support this year.

A separate report from the Fed showed production at factories gained 0.1% in December after a rise of 0.2% in November. Factory output fell at a 2.2% rate in the fourth quarter.

“Manufacturing is a relatively rate-sensitive sector that may benefit from recently lower rates and loosening financial conditions,” said Veronica Clark, an economist at Citigroup in New York.

More articles

Latest article

Magnificent Seven Stocks To Buy And Watch: Nvidia, Tesla Slide

Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023...

Stock Market Today: Dow Jones Falls After Home Depot, Walmart Earnings; Nvidia, SMCI Dive

The Dow Jones Industrial Average dropped Tuesday, as Wall Street reacted to earnings reports from index components Home Depot (HD) and Walmart (WMT)....

Nvidia Weighs on Tech Stocks Ahead of Earnings

Live Coverage FeedNvidia Weighs on Tech Stocks Ahead of EarningsNvidia stock was on track for its worst day since last May on Tuesday ahead...

Super Micro Computer Stock Could Hit $1300, Analyst Says. Here’s Why.

Please enable JS and disable any ad blocker

Nvidia and Intel Stock Investors Have an Intense Week Ahead

In today's video, I discuss recent updates impacting Intel (NASDAQ: INTC) and Nvidia (NASDAQ: NVDA). Check out the short video to learn more, consider...