United States Retail Sales; Consumers’ Confidence to be Influenced by Omicron Variant

Retail sale is an economic indicator in the USA that keeps inventory of demand for finished goods, by measuring the purchases of durable and non-durable goods over a defined time. It is the primary gauge of consumer spending, which accounts for the majority of the overall economic activities.

The state of the COVID-19 pandemic has determined the course of the economy since it was first discovered in March 2020, the economy has grown more resilient to the effect of the virus, as it’s clear that consumer behavior, not government restrictions had the greatest effect on economic outcomes.

United States Retail Sales surged 1.7% month over month in October 2021, above an upwardly revised 0.8% rise in the previous month and surpassing the market forecast of 1.4%. It is the strongest gain since March, as consumers spend more on early holiday shopping and gasoline.

This progression is however in doubt as inflation rose 0.8% in November, slightly higher than the market forecast of 0.7% and compared to 0.9% in the previous month as price increases were seen across many sectors, including gas, food, and housing. This marks the sixth month in a row that the US is encountering price increases.

Consumer confidence moderated in November, following gain in October, according to Lynn Franco, Senior Director of Economic Indicator at The Conference BoardExpectation about short-term growth prospects ticked up, but job and income prospects ticked down”. Meanwhile, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months decreased, however, experts envisage a good holiday season for retailers, although spending will likely face headwinds from rising price, as the recent arrival of the omicron variant of the coronavirus is not great news for the U.S  economy, not least because 70% of the economy relies on consumption.

Economists expect real GDP to grow by 5.6% in 2021, as the ISM Manufacturing Purchasing Manager’s Index in the United States edged up to 6.1 in November from 60.8 the previous month, and the unemployment rate fell by 0.4% to 4.2% in November.

An Increase in Retail Sales will result in US dollar Index strength while a decrease in Retail Sales will result in a US dollar Index decline.

Increased volatility is anticipated, and traders should always be aware that a volatile market presents great opportunities for making profits, as the increase can cause market swings for traders to capitalize on.

In response to the news release, trade the forex market with the following trading instruments on ACT Brokers platform, as the pair are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, USDJPY, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL, etc.

Time Schedule for Retail Sales release:                                                                          

Date: Wednesday, December 15th, 2021

Time: 02:30 PM

Francis Idowu is a Forex Dealer, Financial market analyst and writer, Data Analyst, and Financial Market Strategist with a background in Economics. He specializes in market strategies, Forex fundamental and technical analysis, and has spent over two years as a financial market contributor, observer, and trading coach. He is well known for his informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Economics and Diploma in Structured Programming and Data processing.