A brief talk on Retail sales report

Retail sales figures are a key piece of data in the United States, and its release was the most influential event of the month.

The data are released around 8:30 eastern time on the 13th of every month.

The retail sales report accurately reflects the state of the US economy and is seen as a reliable indicator of inflationary pressures. Although the data is less important than the monthly non-farm payrolls report, it is still one of the data that the Fed is most concerned about when considering US monetary policy.

What is a retail sales report?

Retail sales report data reflect sales of 13 major retailers, including food and beverage stores and even gas stations.

The following is a breakdown of the different types of retailers in the report:

​● car and parts Dealers: 20.6%

● Food and Beverage Store: 12.80%

● grocery store: 12.60%

● Catering Industry: 11.70%

● gas station: 8.2%

It is important to know which industries are the most volatile. For example, car, gasoline and food prices are mainly affected by seasonality, and changes in raw material prices also affect them.

Other factors to consider include political unrest, high oil prices and even bad weather, which can undermine consumer confidence and lead to lower spending.

Interpretation of the report

Retail sales reports are so numerous that most traders just look at two or three key pieces of information. Traders focused on headline data, or "advance retail sales data", as well as revisions to previous reports. It is important to note that analysts' expectations tend to be more uncertain during the holidays, when consumer spending usually increases significantly. The data released during this period are often subject to significant revisions.

Traders also looked at data from the control group. The control group refers to all sales except car dealers, building materials retailers, gas stations, office supplies stores, mobile homes and tobacco stores. Such screened data are more accurate in assessing consumer spending, which accounts for a large proportion of US GDP.

Finally, other data also exclude some of the most volatile retailers from the retail sales data, such as sales data other than cars and cars. This kind of data can replace the data of the control group.

Conclusion

As you know, there are several factors to consider when trading based on US retail sales reports. But as long as they are prepared, traders can use the published data to gain insight into the economy and find many trading opportunities.

Source of course: CME