Retail Sales Index
News release day: Thursday, October 17
The core retail sales index is a vital economic indicator that tracks monthly changes in U.S. consumer spending, excluding volatile categories such as automobiles, gasoline, building materials, and food services. One of the key reasons for the importance of the retail sales index is that it provides clues about the overall health of the economy and potential inflationary pressures. Both factors are significant at the macroeconomic level and help central banks determine the direction of monetary policies. When retail sales are consistently strong, it indicates a growing economy, and we can expect inflation to rise alongside economic growth. In such conditions, employment data should also improve, as goods need to be produced before being sold, leading to more job opportunities.
Retail sales are a market-moving factor; they reflect consumer confidence and purchasing levels, and a high percentage indicates increased economic activity. Retail sales account for about one-third of economic activity in the United States, making the U.S. economy and the dollar highly dependent on this metric. The higher this measure, the greater the likelihood of rate increases. Therefore, an increase in retail sales positively impacts the country’s currency, with a direct influence on the proposed rate of the U.S. dollar.
However, if retail sales increase excessively, it can lead to a weakening of the dollar. If the actual figure for this index is stronger compared to previous forecasts, it may positively affect the demand for the U.S. dollar. In this case, currency pairs with the U.S. dollar as the base currency would rise, while cross currency pairs and gold would decline. Conversely, a weak performance of this index relative to prior forecasts may negatively affect the demand for the U.S. dollar. In this scenario, the U.S. dollar and currency pairs where the U.S. dollar is the base currency could fall, while cross currency pairs and gold may rise.
Retail Sales m/m
News release day: Thursday, October 17
The Retail Sales m/m index measures the total sales of goods and services by retailers in a specific month compared to the previous month. This index includes a wide range of goods, including automobiles, gasoline, food, clothing, and durable goods.
Recognized as a leading indicator in the economy, changes in this index can signal future economic trends. An increase in this index indicates economic growth and rising consumer confidence, while a decrease may suggest an economic slowdown.
The monthly retail sales index can be useful for identifying short-term trading opportunities, while the core index can help assess long-term trends and inform strategic investment decisions. If the actual figure for this index is stronger compared to prior forecasts, it may positively affect the demand for the U.S. dollar. In this case, currency pairs with the U.S. dollar as the base currency would rise, while cross currency pairs and gold would decline. Conversely, a weak performance of this index relative to prior forecasts may negatively affect the demand for the U.S. dollar, leading to declines in the dollar and pairs where it is the base currency, while cross currency pairs and gold may increase.
Unemployment Claims Index
Release Date: Thursday, October 17
The Unemployment Claims index displays the number of individuals who have applied for unemployment insurance for the first time during a week. This index is one of the most important economic indicators in the country and directly affects the market.
Generally, this index is used as a secondary indicator. The Unemployment Claims index is crucial for those who control the country’s monetary policy. Typically, this index is considered a lagging indicator. If the number of unemployment benefit claimants consistently increases or is relatively high, it indicates that many people are losing their jobs. In this case, we are likely to witness an increase in unemployment or a slowdown in labor market growth.
Under such conditions, investors and traders may infer that the economy is not performing well, which could lead to a weak NFP report in the future. If the number of unemployment claims decreases consistently, it suggests that the economy is healthy and the labor market is growing well, which is likely to reflect positively in future NFP reports.
A decrease in the number of unemployed individuals in this index can strengthen the dollar. If the reported figure is lower than expected, it positively impacts the dollar and negatively affects cross currency pairs and gold, and vice versa.
Impact Level: Medium
Release Timing: Weekly (usually every Thursday, but this report can provide data for the week up to Saturday. The report reflects data from the previous week.)