NRF Retail Monitor shows slowest retail sales growth in nearly a year

What happened

The NRF Retail Monitor reported that US retail sales increased at their slowest monthly pace in nearly a year, with American consumers showing signs of strain from high prices.

Despite that strain, the reading indicated that households continued to spend, pointing to softer momentum rather than a halt in consumption.

Why it matters

Consumer spending is the largest component of US economic activity, so private measures of retail demand are watched as an early read on growth and on how far high prices are weighing on households. Slower spending growth feeds into expectations for corporate revenues and for the path of US interest rates.

Those expectations reach markets through the dollar, through equity indices with heavy exposure to retail and consumer demand, and through gold, which tends to react to shifts in the outlook for rates and for the currency. Energy demand assumptions can also be affected when household activity changes.

What to watch

Clients can follow subsequent releases of the NRF Retail Monitor for updates on the pace of US retail sales and on whether price pressures continue to weigh on consumers.