Next Up! US Retail Sales: What to Expect

September 7, 2007

So we know that the labor market is weak after this morning’s non-farm payrolls report and when it is weak, that generally translates into weaker consumer spending. Retail sales, the primary measure of US consumer spending is due out next Friday and this report will be the next most potentially market moving number for the US dollar.

I believe that consumer spending WILL take a big hit in the months to come, but the August spending numbers may not be as bad as everyone expects. Jobs were lost in August, so the big drop in spending should come in September and October. The last time payrolls dropped was in August 2003. That month, retail sales jumped 1.6 percent but in September and October, spending fell -.8 percent and -.5 percent respectively.

Also sales reported by retailers in August were not bad. Here is a nice chart from the Wall Street Journal:

Posted in Forex News, Layoffs, US Economy, Wall Street Journal, consumer spending, payrolls