Among the key economic reports to be released next week in the US are July retail sales on Tuesday. Wells Fargo Analysts they suspect that sales growth slowed to around 0.1%. The market consensus points to a modest decline. Analysts will closely follow upcoming US figures after the sharp drop in consumer confidence reported on Friday.
“Overall, retail sales were expected to slow this summer after their rapid recovery as consumers spent more spending on services and experiences and away from goods. June data set this back as sales rose 0.6%, beating expectations for a 0.3% drop. Rather than revert to staying-at-home habits, the details of the report showed that people were going back out again, with sales at clothing stores, gas stations, restaurants and bars contributing to the pace of sales. “
“Looking ahead to July, we suspect that sales growth slowed to around 0.1%. The expansion of the Delta variant has dampened hopes for a further reopening of the economy. We did not see a reversal in visits to retail and recreation venues or seated diners in restaurants as we had seen in previous waves, but there was a stall on the return to normal in July. While retail sales have performed well in the face of previous COVID waves, it seems unlikely that consumers will feel compelled to splurge on additional durable goods and appliances like they did last year. “
“Durable goods, by definition, are meant to last, so the second appliance or recreational good may not be as useful as the first. In addition, the rise in prices of goods in recent months could have an impact on the label, making people more reluctant to spend. However, over the next two months, the impact of the tax credit advance payments made in mid-July, as well as some much-needed back-to-school purchases, could offset some of these headwinds. “
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