The retail sales figures for July are about to hit the scene this week, and the forecast is looking upbeat.
The U.S. Census Bureau will release the latest retail sales data on Tuesday, Aug. 15. Economists predict a 0.4% jump in total sales for July, a noticeable acceleration from the 0.2% increase we saw in June. Retail sales are projected to stay steady at 1.5% compared to the same month of last year.
Should the forecasts align with the actual data, it will mark the fourth consecutive month of positive growth in U.S. retail sales, a streak not witnessed since January-April 2022. The sustained momentum in U.S. retail sales has alleviated concerns of an impending recession. A robust labor market coupled with receding inflation has bolstered consumer spending and sentiment lately.
June's Retail Sales Data Showed a Mixed Picture
In the latest June's retail sales data, we saw a 0.2% rise in retail sales month-over-month, following a positive revision for May, which showed a 0.5% increase.
The outcome was slightly below expectations (0.5%), with the biggest gains happening in miscellaneous store retailers (up 2%), nonstore retailers (up 1.9%), furniture (up 1.4%), and electronics and appliances (up 1.1%). On the flip side, there were some declines in sales, particularly at gasoline stations (down 1.4%), building materials and garden equipment (down 1.2%), sporting goods, hobby, musical and books (down 1%), and food and beverages stores (down 0.7%).
Treasury Yields On The Rise: Potential Reactions From Sectors ETFs
U.S. treasury yields are climbing again, with the 10-year yield reaching 4.2%, the highest point since March 2023, as recessionary fears fade.
Stronger-than-expected retail sales in July may positively influence cyclical sectors, such as the Energy Select Sector SPDR Fund
Conversely, lower-than-expected retail sales in July may signal waning spending momentum, potentially benefiting defensive sectors like the Utilities Select Sector SPDR Fund
In tech-related sectors, such as the Technology Select Sector SPDR Fund