US Q2 GDP likely to grow at 2.4% yoy

US retail sales fell 0.3% m/m in June. Revisions to the month prior were also negative, taking the headline reading down to +1.0% m/m (originally reported as +1.2% m/m).

From the Fed's perspective, this morning's figures run counter to the improving-economy narrative that is essential for a liftoff in rates. 

According to TD Economics, "With only a few more months of available data before the FOMC's September meeting, we are going to need a decisive turn in underlying economic momentum very soon if a September liftoff is still going to happen. After accounting for the June retail sales figures, our current tracking for second quarter real GDP has been revised lower by 0.2 percentage points to 2.4% (annualized)."

This was unequivocally a disappointing report, with broad based weakness across the majority of categories. Adding to the disappointment were the downward revisions to the month prior, implying less spending activity than we had previously accounted for, added TD Economics.