Mar Retail Sales Dropped by Most in 9 Month, USDJPY Bearish
THE TAKEAWAY: [US retail sales fell in March by the most in nine months] > [Consumer spending slowed down; Federal budget cuts restrained the US economy] > [USDJPY Bearish]
U.S. retail sales dropped in March by the most in nine months, showing slowdowns in American household spending. The Commerce Department released a report today said that retail sales declined 0.4 percent in March, following a revised 1.0 percent advance in February that was smaller than originally reported. The consensus forecast of 85 economists surveyed by Bloomberg News had called for a zero growth in March sales.
At the same time, the Labor Department released a report showed that U.S. producer prices slumped in March by the most since May, falling by 0.6 percent after gained 0.7 percent in the prior month. The core price index, which excluded food and fuel costs, climbed by 0.2 percent month-on-month as expected.
Today's reports indicate some slowdown in consumers spending amid concerns on Federal spending sequestration that went into effect on March 1. Reduced government spending may drag on the output in the near term and impede progress in the job market. Sustained improvement in employment is needed to spur consumer spending, which attributes the most to the economy.
USDJPY 1-minute Chart: April 12, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
In the minutes following the data release, the U.S. dollar declined against the major currencies, with USDJPY falling to 99.18. At the time of this report was written, the USDJPY was trading lower at 99.09.
--- Written by Renee Mu DailyFX Research