U.S. October retail sales preview:

U.S. retail sales statistics for October will be released at 13:30 GMT, today.

Why retail sales and U.S. consumers are important?

• Domestic consumption of goods contributes about 25% of GDP or around $ 4.3 trillion as of 2015. Among these Durable goods such as vehicles, furniture accounts for only $1.4 trillion. Buying of non-durables such as food, clothing account for $2.9 trillion.
   
• Moreover, services, which is not covered by retail sales account for 45% of the GDP and mainly consumed at home.

Past trends –

• Retail sales, as well as, personal consumption expenditure have been growing in last few years. Fed has repeatedly said that personal income growth is robust. However, expenditure has remained weak compared to income.

• Except for growing 0.9% in March, 1.2% in May and 0.6% in July, retail sales have remained subdued throughout 2015. In four months last year growth has been negative.

• Even in 2016, the numbers were very weak.  February and March were negative. However, it has somewhat bounced back since April, when it grew by 1.3 percent, followed by 0.5 percent in May and 0.6 percent in June. But in July, retail sales didn’t grow at all and excluding auto sales it was down by 0.3 percent. In September it grew by 0.6 percent but declined by 0.3 percent in August.

Expectations today –

• Today it is expected to grow by 0.6 percent and by just 0.4 percent excluding autos.

Impact –

• The dollar has remained upbeat recently as inflationary fears and faster rate hike continues to boost the dollar and a better than expected data today likely to boost those expectations more, thus strengthening the dollar.