The increase in inflation did not seem to shake US Retail Sales, which recorded an increase more than expected. The dollar also strengthened after the report.
US Retail Sales data is reported to have jumped.
Data from the US Department of Commerce showed, US Retail Sales rose 1.7% in October (MoM).
The gain was higher than 0.8% in September, as well as expectations of a 1.4% increase.
Meanwhile, Core Retail Sales, which excludes sales of cars, gasoline, building materials, and food, rose 1.7% in October, higher than previously and expectations of a 1.0% increase.
From the report, the market assumes that rising inflation does not affect consumer spending behavior in the US.
This is because the recent growth in the US employment sector has been solid.
Activity in the service sector has also expanded, after slumping to its lowest pace in the third quarter.
"Strong employment, wages and welfare conditions, along with rising public saving, have become more than just compensating for inflation for inflation's blow to purchasing power," said Sal Guatieri, economist at BMO Capital in Toronto. "For now, both consumers and the economy, in aggregate, want to end the year on an upward note."
In addition, tonight's US Retail Sales data also dispelled concerns about the sluggish UoM Consumer Sentiment released last week.
Economists are not sure if the decline in consumer sentiment will then have an impact on consumer spending.
After all, all Americans have savings in banks still totaling roughly $2 trillion in banks during the pandemic.
"This continued weakness in (consumer) confidence does not warrant an immediate change in our near-term forecast for consumer spending. As other more important factors, particularly real disposable income, have held steady at high levels," said Scott Hoyt, economist senior. at Moody's Analytics.
Positive Retail Sales Urge The Fed to Raise Rates, Dollar Strengthens
The US dollar welcomed the increase in Retail Sales data.
The Dollar Index continues the one-week rally, with an increase of 0.29% to 95.7 in the trading session Tuesday (16/November) this evening.
According to Fiona Cincotta's analysis of City Index, Retail Sales, which was apparently not affected by soaring inflation, is considered to be a signal that can urge the Fed to immediately raise interest rates.
This is what drives the US Dollar to appreciate even more.
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