Retail sales rose 0.9% in the United States compared to last month. Admittedly, economists were expecting an increase of 1.0%. However, the progression of the previous month was revised significantly upwards. Adjusted retail sales growth for gasoline, autos, building materials and food services advanced even further, posting growth of 1.0%.
These figures indicate that despite the rise in prices and interest rates, the American consumer shows no sign of concern about his future. This should allow growth to remain relatively solid in 2022.
Credit card purchases have increased, a sign that the American consumer is not worried about losing his job at this point. The unemployment rate remains very low. The American consumer represents about 70% of the economy and at the moment they are showing good financial health. Admittedly, the reserves accumulated during the pandemic have been exhausted, however the household balance sheet remains very solid.
On the corporate side
Tesla founder Elon Musk has decided to temporarily suspend his acquisition of Twitter. The billionaire says he is waiting for more details on the exact number of fake accounts on the social network. This news caused Twitter’s stock to plunge 9.7% on Wall Street. The board of directors of the social network had accepted the takeover offer of 44 billion dollars proposed by Elon Musk at the end of April.
The accelerator for the fall in the markets came on Wednesday with the results of the retail giant Target, which like its competitor Walmart at the start of the week published quarterly results well below expectations. Indeed, the retail sector has to deal with high transport costs, higher markdowns and rising wages (post-Covid). This toxic cocktail caused a massive correction of around 25% and dragged other sectors in its wake.
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