U.S. Retail Sales Better Than Expected

During the Tuesday session, the United States released Core Retail Sales on a month to month basis, as well as Retail Sales for the month of July. The US Senses Bureau announced the better than expected results at 8:30 AM New York time.

The Core Retail Sales number for July came in at 0.8%, which was better than the 0.4% expected. However, this would have been a bit of a washout as the June numbers were revised downward from -0.4% to -0.8%. In other words, the better than expected number was completely matched by the worse than expected revision.

Retail Sales came out better than expected for July as well. This number came in at 0.8%, as opposed to the expected 0.3%. There was also a revision to the June numbers came to the downside as the reported -0.5% number was revised to -0.7%.

The market reaction was initially positive, but as traders read the report a little closer, it became obvious that a lot of the better than expected number came in because of the "seasonal adjustment." When taking into account the retail sales data and July without this adjustment, the United States actually declined 0.9% from $405.8 billion to 402 billion.

This will be part of why the stock market and other risk assets simply could not hold onto gains for the session. With 70% of the economy been attributed to consumption in the United States, this number is of course vital to measure the strength of the US economy on the whole. This is an economic announcement need to be closely monitored, but it must be said that as the numbers initially look positive, when you dig down deeper there really wasn't much to get excited about.