U.S. retail sales preview –

U.S. retail sales statistics for April will be released at 12:30 GMT, today.

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

• Domestic consumption of goods contribute about 25% of GDP or around $ 4 trillion as of 2014. Among this Durable goods such as vehicles, furniture account for only $1.3 trillion. Buying of non-durables such as food, clothing account for $2.7 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. FOMC in its last statement called personal income growth as robust.

• 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, all the numbers have been in negative. In March, growth was -0.3%.

Expectations today –

• Today, it is expected to bounce back to 0.8%. However, when aucts excluded, it is just expected at 0.5%.

Impact –

• Dollar has been showing some strength against Euro, Pound, Aussie, Kiwi and Franc. With better data it is likely to gain more grounds.
• Dollar index is currently trading at 94.3, up 0.2% so far today.