JUNE 24, 2024 – RETAIL SALES MISS EXPECTATIONS
Retail sales in May rose less than expected, raising hopes the Fed will feel confident in lowering rates later this year. Sales growth has slowed as higher prices and inflation have made consumers cut back on discretionary spending. The 2-year tightening of monetary policy seems to have finally affected the economy.
Retail sales rose 0.1 percent in May, below the expectations of 0.2 percent. Excluding car sales, retail sales were down 0.1 percent. The small rise in retail sales bested the 0.2 percent decline in April. On a year-over-year basis, sales are up 2.3 percent. Consumer spending is critical, as it responsible for approximately two-thirds of all US economic activity.
The Fed futures are now saying the probability of a September rate cut has risen to 67 percent, up from 63 percent the week before. And now some traders believe there is a 23 percent chance of three cuts in 2024.