Retail spending in May surged by the biggest one-month increase of all time, and April was revised to a smaller drop than initially reported.
The news helped to fuel renewed buying in European stocks and US index futures, while interestingly the dollar fell further against some risk-sensitive currencies, as the “risk-on, risk-off” trade continues to dominate.
Retail Sales jumped by 17.2% when a rise of 7.9% was expected and core sales increased 12.4% vs. 5.5% anticipated by analysts polled by Bloomberg.
This is clearly good news and adds to the biggest rise in May employment we saw a couple of weeks ago. With government spending surging already in response to the pandemic, we now need to see further sustained rises in consumer spending to fuel a sharp economic rebound in the months ahead. One month’s worth of data just won’t be enough.
Following the news, risk assets
already boosted after Monday’s reversal, extended their gains sharply with indices, crude oil and commodity dollars all benefiting:
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