Retail Sales

(MoneyWatch) 

Why should you care about retail sales figures?

The monthly retail sales report is a key measure of economic health, and is particularly valued because it tracks activity in close to real time, reporting the previous month's sales, unlike many economic indicators, which come out months after the activity being measured occurred. Retail sales are considered a good proxy for consumer spending, which represents nearly two-thirds of the U.S. gross domestic product. As a result, policy makers and investors watch retail sales figures closely to assess the near-term prospects for economic growth and inflation.

Investors pay close attention to the indicator to see how actual sales compare with expectations. Better-than-expected sales figures may push stock prices higher if investors have been concerned about an economic slump. But the same positive report may instead lead to a sell-off if investors are worried that the Federal Reserve will raise interest rates to fight inflation. Follow the links below to learn more.

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