Breaking: US Retail Sales slide by 1.9% in December vs. 0.1% expected decline

• Headline Retail Sales dropped 1.9% MoM, larger than the expected 0.1% decline. 
• There wasn't any notable reaction in FX markets.  

US Retail Sales fell by 1.9% MoM in December, according to data published by the US Census Bureau revealed on Friday. That was well below market expectations for a MoM decline of -0.1% and marked a sharp deceleration from November's growth rate of 0.2% (downwardly revised from 0.3%). That meant that the YoY growth rate in retail sales eased to just under 17.0% from 18.24% in November. 

Core Retail Sales posted an even larger MoM miss on expectations, dropping 2.3% in December versus forecasts for a 0.2% rise, versus November's 0.1% MoM rise (which was revised lower from 0.3%). The Retail Control, which is more closely correlated to the retail consumption component in US GDP, fell 3.1% MoM versus expectations for a 0.1% gain in December. 

Market Reaction

The DXY was a tad choppy but has not seemed to see much of a reaction to the latest Retail Sales report. Despite the poor figures, Retail Sales remain historically elevated on the YoY metrics, having been boosted in Q1 2021 by massive fiscal stimulus.