Retail sales report

Retail sales index is an economic index that shows consumer demand for consumer goods. This index is considered a very important index in the economy, because it has a great impact on the financial markets and is published monthly. The retail sales report is published every month by the U.S. Census Bureau and shows the direction of the economy. This index acts as an important economic barometer, because it can show whether the country's economy is under inflationary pressure or not. Retail sales index is calculated by considering durable and non-durable goods in a certain period of time. Data is collected from 13 different types of businesses, from food services to local stores, to compile the retail sales report.

Retail sales report is a good measure to evaluate the economic health of a society. This report can show that the country's economy is going towards contraction or expansion. Retail sales figures are reported by all retail stores to the US Census Bureau, where they are processed. These measurements are usually based on sampling and are used to model patterns to generalize to the entire country.

As a macroeconomic indicator, if the retail sales figures are favorable, they indicate positive movements in the capital markets. More sales are good news for the shareholders of small companies, because it means more income for these companies. On the other hand, investors who have invested in bonds move against this flow. A growing economy is good for everyone, but if retail sales figures are low and the economy is contracting, it could mean deflation. This can cause investors to turn to assets such as bonds, and because of this, the value of these bonds will increase.

The retail sales index takes into account in-store, catalog, and out-of-store sales statistics for durable goods (goods that last more than 3 years) and non-durable goods (goods that last less than 3 years). These small businesses are divided into several general categories, which are mentioned below:

As a comprehensive economic index, the retail sales index is considered one of the most timely economic indicators, since the life of this report is only a few weeks. Smaller companies also typically report their sales figures to the U.S. Census Bureau each month, and their company's stock can fluctuate as the data is processed.

If the stock values ​​of the companies have significant changes, they can affect the final retail sales report. These price fluctuations are usually observed in two subcategories: grocery stores and gas stations. The sharp increase in food and energy prices can cause the retail sales figures to drop in these two groups. Therefore, these changes can affect the entire retail sales figures of a month.

The correct measurement of retail sales plays a very important role in evaluating the health of the country's economy. The reason for this importance is that consumer spending and Personal Consumption Expenditure make up only two-thirds of the Gross Domestic Product. The US retail sales report is published monthly.

Data for this report are collected by the US Census Bureau through monthly surveys. The retail sales report, released in the middle of each month, shows all the retail sales figures for that period. This period of time is usually related to the previous month, and the percentage of its changes compared to the previous month is also expressed. The report also includes annual changes to cover seasonality in retail sales figures.

Sales figures are usually expressed in two ways:

Most economists calculate retail sales without taking auto spending into account, as these figures fluctuate more than other sectors. The same applies to the sales figures of gas stations, because the price of fuel is also affected by the fluctuations of the oil and energy market. The main reason this fluctuating data isn't factored into the analysis is that consumers have no choice but to pay the increased price to survive anyway.

The retail sales index changes from season to season. The fourth season (October to December) usually shows the highest retail sales figures, because some holidays (Thanksgiving, Christmas, etc.) are in this season. The sectors that make the most changes from one season to another are electronics, sports equipment, online shopping and clothing.

The forex market always pays special attention to the retail sales reports of the world's major economies. In fact, the Forex market is one of the largest and most dynamic financial markets in the entire world.

Dynamics is one of the main features of the forex market, so traders of this market can take advantage of any kind of price movement. But it is important to know that there are factors that can change everything in an instant. Retail sales reports are among these changing factors, because they indicate the rate of growth of a country's economy.

Retail sales reports published by the United States of America, England and the Euro zone are among the most important indicators that affect the exchange rate of currency pairs in the forex market. These reports usually change currency pairs with the US dollar on one side.

Both the US economy and the US dollar exchange rate are heavily dependent on retail sales figures. Retail sales alone make up a quarter of the US economy.

The higher the retail sales index, and the higher the interest rate. It is natural that the value of the US dollar will increase against other currencies when retail sales figures are favorable in a given period. Of course, too much increase in retail sales figures could backfire and weaken the US dollar against other currencies.

Due to the fact that many American goods are produced outside of this country, the increase in demand for these goods can also mean an increase in the demand for the currency of the country of production. Therefore, if there is a negative correlation between the US dollar and that country's currency, an increase in retail sales figures can be damaging.

Retail sales index is an important economic index, which can be used to evaluate the health of a country's economy. Forex traders use this index to predict the interest rates of various currencies in the foreign exchange market, so that they can profit from price movements in the future. Reviewing the retail report is a part of fundamental analysis, which is used by fundamental analysts or forex market traders.

Aron Groups Broker offers several fundamental analysis tools such as the economic calendar. In this forex broker, You can find out about different financial reports such as retail sales, GDP, NFP, etc.

Written by: Mohsen Mohseni (Aron Groups).