Retail Sales Miss Expectations, Fueling Recession Fears

Key Insights

• Retail Sales missed analyst expectations. 
• Initial Jobless Claims report highlighted the strength of the job market. 
• S&P 500 futures declined to new lows in premarket trading after Retail Sales data.

Retail Sales Dropped 0.6% In November

Today, traders will focus on the Retail Sales report for November. The report indicated that Retail Sales declined by 0.6% month-over-month, compared to analyst consensus of -0.1%. Excluding autos, Retail Sales decreased by 0.2% month-over-month.

Meanwhile, Initial Jobless Claims report indicated that 211,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobelss Claims of 230,000. The report highlighted the strength of the job market.

NY Empire State Manufacturing Index declined from 4.5 in November to -11.2 in December, compared to analyst consensus of -1. Philadelphia Fed Manufacturing Index improved from -19.4 to -13.8, while analysts expected that it would increase to -10.

The reports show that the consumer and the economy feel the pressure from higher interest rates. However, the job market remains strong, which is bullish for the U.S. dollar as the Fed keeps a close eye on jobs and unemployment.

Today, traders will also have a chance to take a look at the Industrial Production and Manufacturing Production reports for November. Industrial Production is expected to decline by 0.1% on a month-over-month basis, while Manufacturing Production is projected to grow by 0.1%.

S&P 500 Futures Test New Lows After Retail Sales Data

S&P 500 futures moved below the 3950 level after the release of economic data. The majority of the reports missed analyst estimates and highlighted recession risks.

U.S. dollar pulled back but maintained healthy gains against a broad basket of currencies.

Gold rebounded towards the $1780 level, driven by the pullback in the U.S. dollar and lower Treasury yields.

For a look at all of today’s economic events, check out our economic calendar.