Amid continued declines in gasoline prices, easing inflation expectations and improving American consumer confidence, another rise in US Retail Sales may not come as a surprise for September. A more precise measure, the Control Group, is expected to show an increase, which could have a significant impact on US dollar trading. The US Census Bureau will publish this data on October 14 at 12:30 GMT. US consumer spending, as measured by Retail Sales, is expected to rise by 0.2% MoM in September after posting an unexpected increase of 0.3% in August. Retail Volumes in July were revised lower to a 0.4% decline. Meanwhile, Retail Sales Control Group (ex-food services, autos, gas, building materials) for September is seen rising by 0.3% from 0% in August. Core Retail Sales (ex-Autos) are likely to decline by 0.1% MoM in the reported month vs. -0.3% reported previously. Note that these figures are not adjusted for inflation. In August, American shoppers showed resilience despite four decades of high inflation, as most retail categories grew last month, as cheaper gas prices allowed Americans to spend more on food, motor vehicles and other discretionary purchases such as building materials and garden equipment.

US Dollar Trading with Retail Sales

The forecast reading for the Control Group cannot be ruled out after the previous miss. However, the headline figure could garner even more attention if the result can surprise to the upside this time as well. For the US dollar to regain upside traction, the Core figures would also need to show an unexpected increase. The data is not adjusted for inflation. Therefore, only the above estimate would represent the actual growth in sales. If Core Retail Sales prints below estimates or even in line with estimates, it could imply that consumers are feeling the pinch of widespread inflation despite some relief from lower gas pump prices. This could also weigh on the dollar temporarily, as expectations of steeper Fed rate hikes to tame inflation would trump and keep the greenback on the back foot. It is worth noting that the US dollar’s ​​reaction to the Retail Sales release could be influenced by persisting risk trends and Fed rate hike expectations, as it replaces the all-important Consumer Price Index (CPI) release due later on Thursday at 7:30 PM ET (12:30 GMT). US inflation is the most critical gauge and will determine the size of the Fed’s November rate hike, especially after Wednesday’s FOMC minutes. The minutes showed that Fed members “expected higher borrowing costs to slow economic activity by curbing spending, hiring and investment, which would dampen inflationary pressures.” Currently, the market is pricing in an 81% probability of a 75 bps Fed rate hike next month. Key Points


  • The Retail Sales Control Group is expected to rise 0.3% in September after previously missing.
  • Core Retail Sales will fall 0.1%, as high inflation digs a hole in consumers' pockets.
  • Only Core figures can revive the US dollar's uptrend.
In conclusion, Friday's US Retail Sales and University of Michigan (UoM) data will also be closely watched, as they will shed light on the trend of additional households amid rising interest rates and ongoing cost-of-living pressures. This US Retail Sales will be tonight. Don't miss the data because it will affect the change in the dollar price. You can check the results of this Retail Sales data again through the GIC Journal News. Start trading also at GIC to be able to trade with a small capital starting from IDR 150,000!