December 24, 2024

Ferrum College : Iron Blade Online

Complete Canadian News World

The S&P 500 and Nasdaq are hovering near record levels after the failure of retail sales

The S&P 500 and Nasdaq are hovering near record levels after the failure of retail sales

The disappointing retail sales report “shows rising interest rate pressures, with housing-related spending categories continuing to decline in May,” Oxford Economics said in a note early Tuesday.

“There was also a sudden drop in spending on restaurants and bars [which declined 0.4% during the month]Although there is other evidence to suggest that spending on other services is holding up well. A price-related decline in petrol station sales also weighed on the headline figure, wrote Michael Pearce, deputy chief US economist at Oxford University of Economics.

Retail sales in May rose just 0.1%, missing the 0.3% expected by economists polled by Bloomberg. Retail sales in April fell by 0.2%according to revised data from the Ministry of Commerce.

Excluding autos and gas, retail sales rose 0.1%, below estimates for a 0.4% increase but higher than the 0.3% decline recorded in April.

“Consumer spending is slowing because real income growth has moderated and because some consumers have become credit constrained amid rising interest rates and increased use of credit cards,” Pearce said. “However, with unemployment rates unlikely to rise much and the state of household balance sheets continuing to look generally strong, we expect consumer spending growth to remain close to its current pace in the second half of the year.”

Raymond James’s chief economist, Eugenio Aleman, was a bit more pessimistic: “The downward revisions for April show a very weak start by the US consumer during the second quarter of the year, which is consistent with our view of the US economy.”

Last week, the Fed indicated it would cut interest rates just once this year, down from the three cuts the central bank expected in its previous forecast in March.

The central bank still expects a strong economy at the end of the year. Officials believe that the unemployment rate will stabilize at 4% in 2024, which is consistent with previous expectations. The unemployment rate is expected to rise to 4.2% in 2025 before falling to 4.1% in 2026.

The Federal Reserve maintained its previous forecast for US economic growth, with the economy expected to grow at an annual pace of 2.1% this year before falling slightly to 2% in 2025 and remaining at that level until 2026.