The last important data before the Federal Reserve interest rate decision has been released, analysts do not expect it to have a significant impact on this week's meeting.
Data released on Tuesday showed that retail sales in the USA unexpectedly rose in August, suggesting that the US economy has remained solid for most of the third quarter.
The monthly retail sales rate in the USA recorded 0.1% in August, exceeding the expected -0.2%, and the previous value was revised from 1% to 1.1%.
The core retail sales (excluding autos) increased by 0.1% month-on-month, lower than the expected growth of 0.2%; if excluding autos and rbob gasoline, the retail sales in August increased by 0.2% month-on-month, falling short of the expected 0.3%, but marking the fourth consecutive month of growth.
After the data was released, the usd rose nearly 20 points in the short term, while spot gold fell by $8 in the short term, temporarily falling below $2570, and then quickly rebounded. The three major US stock index futures edged up slightly.
On the eve of the release of the 'last important data before the Fed interest rate decision,' investors generally expect the Federal Reserve to cut interest rates for the first time since 2020. The latest policy decision will be announced at 2 p.m. Eastern Time on Wednesday.
Institutional analysts evaluating US retail sales data said that it is unlikely to have a significant impact on this week's FOMC policy report.
The market has been debating how much of a rate cut the Federal Reserve will implement. With signs of a slowing labor market and the inflation rate falling to the Fed's 2% target, the market is inclined to price in a 50 basis point rate cut by the Federal Reserve.
According to CME's FedWatch tool, there is a 67% chance of the Federal Reserve cutting interest rates by 50 basis points, while there is a 33% chance of the Federal Reserve opting for a smaller rate cut of 25 basis points.
However, most economists expect the Federal Reserve to cut interest rates by 25 basis points this week. They believe that the economy is not in a crisis, so it is unable to implement the expected 50 basis points interest rate cut in the financial market.
After four consecutive months of increase, the unemployment rate in August dropped from the three-year high of almost 4.3% in the previous month to 4.2%. It is worth noting that the rise in the unemployment rate is mainly due to the increase in immigrant labor supply, and the supply of immigrant labor is slowing down.
By historical standards, the number of layoffs is still low, which keeps the wage growth in the labor market stable, thus supporting consumer spending and the overall economy. However, economists have different views on the impact of the decline in the savings rate on spending.
Some people believe that the savings rate, which dropped to 2.9% in July, close to the level of 2008, indicates that future spending will be weaker. They also expect that if the labor market deteriorates, precautionary savings will increase, which may put pressure on spending.
However, others believe that the government has not fully captured the income of undocumented immigrants. They also point out that strong household balance sheets, supported by rising real estate and stock prices, will underpin future consumer spending.
Editor/Somer