US retail exchanges record robust expenditure beginning for July-September period

(MENAFN) US retail sales data for July indicate a robust start to the third quarter, as highlighted in a report by the Conference Board. According to Dana Peterson, the chief economist at the Conference Board, nominal retail sales rose by 0.97 percent month-over-month in July, while real retail sales increased by 0.81 percent. This strong performance suggests that consumer spending, particularly on goods and dining out, was vigorous at the beginning of the third quarter. Additionally, real retail sales grew by 3.2 percent year-over-year in July compared to the second quarter of 2024, underscoring the sustained strength in consumer expenditure.

Peterson noted that the July retail sales increase could alleviate concerns about a potential recession in the US economy. However, she also emphasized the need for more comprehensive data, particularly on spending in the services sector, which will be released on August 30, to fully assess the economic outlook. The recent data on consumer inflation and retail sales support the view that the Federal Reserve may be poised to begin reducing interest rates in September, potentially by 25 basis points.

In terms of inflation, the Consumer Price Index (CPI) in the US rose by 2.9 percent annually in July, a slowdown from the 3 percent increase recorded in June. On a monthly basis, the CPI increased by 0.2 percent in July, marking an acceleration from the 0.1 percent decline observed in June. Core CPI, which excludes the more volatile food and energy prices, also saw a monthly increase of 0.2 percent in July, up slightly from the 0.1 percent rise in June. Annually, core CPI climbed 3.2 percent in July, the smallest yearly increase since April 2021, and down from a 3.3 percent rise in June.

Looking ahead, the Conference Board forecasts that the Federal Reserve may implement 75 basis points of rate cuts by the end of 2024, with the federal funds rate projected to fall to just above 3 percent by the end of 2025. This anticipated easing in monetary policy reflects the Fed’s response to the evolving economic conditions and inflation trends.

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