US retail sales rose by 0.2% as expected. The surprise came from core sales, which rose by 0.7%, far better than 0.4% predicted. This is positive news for the US economy. However, previous numbers were revised to the downside: sales rose by only 0.4% in November (0.7% initially reported), and core sales by only 0.1% (0.4% originally reported). Nevertheless, the picture is still of growth. The volume of sales is always an important gauge for the health of the US consumer, and is even more important in December – the month of Christmas shopping.
EUR/USD was trading steadily at 1.3675 prior to the publication. GBP/USD recovered from the downfall and climbed back to 1.6440, while USD/JPY was around 103.50. The US dollar is marginally stronger after the good news, but isn’t going anywhere fast. The most notable rise is against the yen, with USD/JPY topping 103.60.
Import prices were expected to rise by 0.3% but they remained flat. This is second tier indicator for inflation. It may have a strong impact when it is far off the mark.
The surprisingly weak Non-Farm Payrolls triggered confusion for the next FOMC meeting, as it came after a long streak of positive US figures. This uncertainty is what makes every figure more important than earlier, thus creating more volatility.