From our colleagues at our sister company, Argent Trust:
In this morning’s data, Retail Sales for July increased 0.7%, higher than expected and higher than the previous month. Monthly sales for Non-store retailers, up 1.9%, were strong while monthly sales at Furniture stores, down -1.8%, were relatively weak. The Control Group, which is a closer measure of the inputs for GDP that excludes sales for food, autos, building materials, and gas stations, increased 1.0% in July, double what was expected and the revised level from the previous month.
Overall, headline retail sales and the control group both increased in July more than expected and were stronger than the previous month. Despite earlier predictions of a slowing economy at this point in the year, consumers have continued to spend. Meanwhile, in today’s earnings release Home Depot said strength was seen in smaller home projects, but indicated there was continued pressure on big-ticket, discretionary categories. Consumers may be shifting their spending within various categories amidst the continued tight monetary policy stance by the Federal Reserve to ensure inflation moves further to their goal. Amidst this process, the race between falling inflation and when the unemployment rate may increase will be key for the consumer, the markets, and the economy in the months ahead.
In all, the 10-year US treasury yield initially ticked higher following the report, but is now little changed, and equity futures are lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.