Retail sales control group
- Prior control group was +0.3%
- Headline retail sales +0.4% versus +0.3% expected
- Retail sales $714.4 billion versus $711.3 billion prior
- Prior m/m sales +0.1%
- Retail sales y/y +1.7% versus +2.2% prior
- Ex autos +0.5% versus +0.1% expected
- Prior ex autos +0.1% prior (revised to +0.2%)
- Ex autos and gas +0.7% versus +0.3% prior
After of this report, the market was pricing in a 95% chance of a Fed cut in November and a similarly high probability of two cuts this year.
There is no sign of consumer weakening in this report and that's cut the odds of a Fed cut in November down to 87% from 95% in the Fed funds futures market.
Nonstore retailers (mostly e-commerce) continue to show strength, up 7.1% from last year. Food services and drinking places also performed well, rising 3.7% y/y in a good sign of a healthy consumer.
The robust sales figures suggest consumer resilience in the face of elevated inflation and rising interest rates.
