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US Retail Sales Fall By The Most Since August 2005
Wednesday, 15 October 2008 12:32:10 GMT  |  Terri Belkas, Currency Strategist
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US Advance Retail Sales fell sharply during the month of September at a rate of 1.2 percent, marking the worst result since August 2005. A 3.8 percent slump in auto sales contributed the most to the decline amidst a combination of high gas prices and waning demand for durable, expensive goods. Most other components also fell, with furniture and clothing sales both down 2.3 percent, while spending on everything from furniture to sporting goods slipped as well. Overall, given the clear deterioration in the labor markets along with tighter credit conditions for banks, businesses, and consumers alike, we are likely to see consumption in the US slow further through the end of the year.

Nevertheless, the US dollar has strengthened on the release as risk trends remain the dominant driver of price action in the forex markets. Indeed, stock market futures are down more than 2 percent, with the DJIA likely to open down as many as 200 points, as the US government's intervention efforts have yet to boost investor confidence.

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