A monthly economic indicator measuring the total receipts of retail stores, reflecting consumer spending patterns. Since consumer spending drives roughly two-thirds of GDP in most developed economies, retail sales significantly impacts currency valuations.
What Retail Sales Measures
Retail sales tracks the total value of sales at the retail level, covering everything from food and clothing to electronics and automobiles. In the U.S., the Census Bureau releases the report around the middle of each month. Most major economies publish similar data, including the eurozone, UK, Canada, and Australia.
Consumer Spending and Forex
Consumer spending accounts for approximately 68% of U.S. Gross Domestic Product (GDP) and similar proportions in other developed economies. Rising retail sales suggest consumer confidence and economic strength, which can lead to higher interest rates and a stronger currency. Declining sales signal economic weakness and potential rate cuts.
Traders often look at the core retail sales figure, which excludes automobiles due to their price volatility, for a cleaner view of underlying consumer trends.
Using Retail Sales in Analysis
Retail sales data is most useful when combined with Consumer Confidence readings and employment data like Non-Farm Payrolls (NFP). Strong retail sales alongside rising employment typically paint a bullish picture for a currency.
Related Terms
Consumer Confidence
A survey-based indicator measuring how optimistic or pessimistic consumers are about the economy and their personal financial situation. Higher confidence typically supports a currency by signaling future spending growth.
Gross Domestic Product (GDP)
The total monetary value of all finished goods and services produced within a country during a specific period. GDP is the broadest measure of economic activity and a key driver of currency valuations.
Ready to trade live?
XTB. Our pick for technical analysis. The xStation 5 platform with advanced charting, $0 minimum deposit, FCA and KNF regulated.
71% of retail CFD accounts lose money when trading with this provider.