WASHINGTON (Reuters) – U.S. retail sales fell in October, a sign of slowing demand that could reinforce expectations that the U.S. Federal Reserve (Fed) is done with raising interest rates. ‘interest.
Data released by the Commerce Department on Wednesday showed that sales contracted 0.1% last month, compared with a 0.3% drop expected on average by economists polled by Reuters, after an increase of 0.9%. % in September (revised from +0.7%).
Excluding automobiles, fuels, construction materials and catering services, however, they recorded an increase of 0.2%, in line with expectations, after an increase of 0.7% the previous month (revised from 0.6%).
This category is closest to the component of household consumption expenditure used in the calculation of gross domestic product (GDP).
On Tuesday, other official statistics showed that consumer prices (CPI) in the United States decelerated more sharply than expected in October, with the index showing zero month-on-month growth and a slowdown at +3.2% over one year.
That report, combined with slowing job and wage growth, led economists to conclude that the Fed’s current round of monetary tightening, which began in March 2022, was now at its peak.
Financial markets even anticipate a rate cut next May, according to the CME group’s FedWatch barometer, while the federal funds rate target is currently moving within a range of 5.25%-5.50% after an increase of 525 basis points in just over a year and a half.
The decline in retail sales suggests that consumers are starting to feel the pressure from rising interest rates, with most low-income households relying on credit cards to finance purchases after using up excess savings accumulated during the COVID-19 pandemic.
On Wall Street, futures increased their gains after the publication of retail sales figures, as well as producer price statistics in the United States which showed a greater slowdown than expected.
The Dow Jones advances by 0.18%, the Standard & Poor’s 500 by 0.22% and the Nasdaq by 0.44% in future contracts.
(Report by Lucia Mutikani, by Claude Chendjou, edited by Kate Entringer)
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