In this morning’s data, Retail Sales decreased -0.9% in January, much weaker than expected, however the previous month was revised higher. The Control Group, which is a closer measure of the inputs for GDP that excludes sales for food, autos, building materials, and gas stations, decreased -0.8% in January, notably negative as expectations were for an increase.
Reviewing the various categories, monthly sales for Department Stores, up 0.8%, were relatively strong while monthly sales at Motor Vehicle & Parts Dealers, down -2.8%, and Non-store Retailers, down -1.9%, were relatively weak.
Overall, retail sales fell much more than expected in January for both the headline figure and the control group which goes into GDP. Consumers slowed down their spending and are more intentional in what they purchase, as discussed in recent earnings reports. The weakness is offset somewhat by the higher revisions of the previous month.
Earlier this week, both the Consumer Price Index and Producer Price Index came in hotter than expected, suggesting inflation is still an issue. It remains to be seen if consumer activity slows enough to allow for a disinflationary trend to resume. The Federal Reserve is likely to remain patient with their policy to evaluate this dynamic as well as to evaluate the impact of expected tariffs in the coming weeks.
In all, the 10-year US treasury yield initially ticks lower following the report and equity futures are also lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
