Latest / Markets with Megan: A Quick Financial Markets Update / Retail Sales Defy Expectations Amid High Interest Rates | Episode 155 | 07-16-24
Transcript
- 0:00Megan Horneman: Well, a record high credit card debt and very high interest rates is not stopping the consumer.
- 0:05Megan Horneman: This morning it is Tuesday, july 16th, and we got the June reading on retail sales and what we saw was this report came in better than expected across all of the different segments that we look at.
- 0:17Megan Horneman: So let's just look at headline retail sales.
- 0:19Megan Horneman: The expectation was that this would decline 0.3% for the month, because we know that gasoline stations sales have been lower, but in fact that came in flat, and that's after being upwardly revised for the month of May.
- 0:32Megan Horneman: When you strip out some of these volatile items like autos and gas, this report came in up eight-tenths of a report, also with an upward revision to the prior month.
- 0:42Megan Horneman: And then, when we go really really digging into and strip out all of the volatile items, including building materials, this came in 0.9% on a month-over-month basis.
- 0:54Megan Horneman: The expectation was for it to only rise 0.2%.
- 0:57Megan Horneman: So when you look at that, that matches the best reading that we've seen on a monthly basis for retail sales since April of 2023.
- 1:05Megan Horneman: So let's dig into some of the things that consumers started to spend on.
- 1:09Megan Horneman: The biggest decline was in motor vehicles, so we've seen that automobile prices are down and also, sales have been down, but we did see some big upticks in internet sales.
- 1:21Megan Horneman: We saw also some significant upticks in building materials, health care, personal care as well as clothing.
- 1:30Megan Horneman: We saw a little bit of softness in the restaurant sales, so it still does prove to us that consumers may be pulling back a bit on some of the discretionary items, but on balance, this is a very solid report.
- 1:41Megan Horneman: The equity markets are continuing the rally that we saw yesterday.
- 1:44Megan Horneman: The optimism around this perfect soft landing and the Fed being able to come in and cut interest rates as early as September continues to fuel this rally, and we're seeing the rally broaden out beyond the main technology names that have led this market higher this year.
- 1:59Megan Horneman: That's all that we have today.
- 2:01Megan Horneman: Please like the podcast.
- 2:03Megan Horneman: Share it with your friends and families and if you'd like to see any other podcasts that we have, please feel free to reach out to verdence dot com backslash podcasts website.
- 2:12Megan Horneman: Thank you.