Retail Sales
What is Retail Sales?
Retail sales is a closely watched indicator on consumer spending. It captures
sales at retail stores, but tends only to include goods so wont give a full
picture of consumer spending (without services). Most countries report some sort
of retail sales metric, generally on a monthly basis, but some on a quarterly
basis also (which lines up with the GDP
reporting cycle, and thus can be a useful proxy or indicator for the consumer
spending part of GDP). In consumer driven economies like the US, it is a
critical indicator of economic activity and may give early clues to the
direction of the economy. Retail sales tend to track relatively closely to consumer
confidence.
How does it relate to Markets?
Retail sales figures will often move markets, particularly if there is no other
news out that day and if the result is a surprise against expectations; and/or
if it backs up other recent news. In general improving retail sales figures are
good for markets. Improving figures are particularly good when the economy is in
recession as they can point to a normalization of activity and/or start of an
economic recovery. Likewise generally strong figures will be symptomatic of a
strong economy. In terms of individual stocks, obviously businesses that are
exposed to the retail sector will be highly affected by the level of retail
sales e.g. retailers, suppliers to retailers, commercial (retail) real estate,
etc.
Core or Ex-Autos
Retail sales releases often include a core measure i.e. excluding autos (much in
the same way that inflation
releases include measures of core inflation i.e. excluding volatile components
such as food and energy). The purpose of excluding autos (a particularly
volatile element) is to reduce the volatility in the reported figures, helping
analysts to see the underlying trend, if any.
Sources and further reading:
Economic Indicators - US Retail
Sales
Investopedia
- Retail Sales
Investor Words - Retail Sales Index
US Census Bureau - Retail
Sales Report
Graph Library:
Metric
- Retail Sales
Original Source:
http://www.econgrapher.com/encyclopedia-retailsales.html
Back to the Econ Grapher Encyclopedia
About
|
Econ Grapher is all about insightful and innovative analysis of economic and financial market data... |
|
|
Econ Grapher - EncyclopediaEver wondered what exactly people mean by GDP? or why people look at PMI? or why the personal savings rate matters to an economy? |
|
|
Follow Econ Grapher |
|
|
|
|
Help me provide you with more and better material: |
|
|
Sponsors
If you're an investor who is considering trading in the $3 trillion a day in forex market, consider opening a forex demo account to test your skills.
New to Forex? Try a free forex software and learn the different types of currency movements.