U.S. retail sales grew 0.4% in December. Although lower than expectations of 0.6%, some economists said the report could boost GDP (gross domestic product) growth in the fourth quarter. The retail sales control group actually beat expectations and pushed the number up 0.7% sequentially.
Interactive Brokers Senior Economist José Torres joins Julie Hyman and Josh Lipton for a deeper conversation about data printing.
“Consumers responded to the stress by spending a lot of money one month, only to pull back the next month,” Torres said. “But looking at the four months through December, our growth is strong and trending higher.” Like you said, the strong performance in the control group was stronger than expected; the control group basically eliminated some of the more volatile factors like cars, fuels, building materials, etc., and was more directly related to GDP.”
Torres attributed December’s consumer price index (CPI) headline and core inflation numbers to volatile energy costs and cooling home prices and inflation.
“However, what is the uncertainty? The uncertainty is the Trump administration adopting a hostile trade posture. So that does threaten to reflationate commodities; commodities do drive the deflation train starting in 2022. We see Those high numbers are down to 89 percent for both men [percent] Dealing with what we saw today. So if commodities start to re-inflate, we’re going to have some significant problems,” Torres told Yahoo Finance.
“On the labor side, there are also some immigration risks,” the economist added.
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The author of this article is Luke Carberry Morgan.
