Retail Sales Preview: Another Strong Month?

The U.S. Commerce Department will release the monthly retail sales figures for June at 8:30 a.m. ET, with the consensus estimate for a gain of 0.3 percent, with analysts estimates ranging from 0.2 percent to 0.6 percent, according to Bloomberg. Retail sales, excluding the more volatile autos and gas components, are expected to show more solid gains of 0.6 percent. This follows a strong May retail sales number, coming in at 1.2 percent and causing some economists to up their GDP forecasts. Consumer spending is a key component of economic growth, accounting for nearly 68 percent of overall GDP. Retail sales measure the total revenues at retail and food service stores that sell merchandise and related services to consumers. Retail sales are a major indicator of consumer spending trends because they account for nearly 50 percent of total consumer spending and approximately one third of overall economic activity. A stronger-than-expected retail sales number could raise the prospects of the Federal Reserve raising rates sooner, which would be generally bearish for both the bond and stock markets. Retail stocks, however, would likely benefit from a stronger than expected retail sales figure. S&P 500 futures are trading slightly lower in front of the retail sales release.