Yesterday, the US Commerce Department released a report about the rise in retail sales for July. The report thoroughly explained the 0.6% rise in July’s sales – right after registering 0.3% decay in June, actual data aligning with the forecasted values. Retail sales excluding the automobile market went up with 0.4% last month, following a revised 0.4% growth in June. As before, expectations were met. Beside the retail sales figures, the report also offered strong documentation in favor of the continuous labor market development and salary growth, these being the most important wheel in the consumption mechanism. Retail sales (or as some analysts like to call it – household spending) represent more than 70% of USA’s economy. The growth recorded raises the probability of Fed raising the rates next month.
The US Labor Department’s analysis over the import prices resulted in an index fall of 0.9% in July, this after a previous 0.1% drop in June. The main reason seems to be the fuel prices slump. Also, in favor of the labor market strength, the jobless claims in July roamed very close to a four-decade low. More specific, there was a rise of 5K in the jobless claims last week, the numbers reaching 274K from a revised 269K two weeks before. Taking a look at a more accurate measuring method widely used in analyses, the four-week MA (Moving Average) decreased to 266.35K last week, recording its lowest level since April 15th, 2000; the MA was at 268K two weeks ago. On the other side, the people relying on jobless benefits rose by 15K, reaching 2.27 million in the week ending in August 1st.
The British Pound strengthened against the US dollar, recovering from 1.5570 to over 1.5600. After the US retail sales news, the pair traded at 1.5639, sign that investors take into serious consideration the possibility of Fed raising rates in September. The heat turned down after a while, the session closing at 1.5614
The AUD/USD managed a comeback yesterday, settling around 0.7355 after being unable to break the 0.7400 resistance on Wednesday when it fluctuated from 0.7230 to 0.7405. The lowest value recorded yesterday was during the Asian session, at 0.7320.
There was a significant hike in yesterday’s crude oil prices decline. The WTI (West Texas Intermediate) barrel hit the $42.00 area, more exactly $42.20. The good news on the USD pushed the price of crude even lower, reaching values not recorded since March, 2009.
