Fed keeping keen eye on retail sales data in the US

Mr Jerome Powell says the Fed will be looking to see if spending in the US has popped back up in January.
Mr Jerome Powell says the Fed will be looking to see if spending in the US has popped back up in January.

NEW YORK • Federal Reserve chairman Jerome Powell has said the US central bank will be watching retail sales data, due late yesterday, for signs that consumer spending has bounced back from a surprisingly weak end to 2018.

"We're, of course, watching that," Mr Powell said in an interview with the CBS programme 60 Minutes broadcast on Sunday. "The reason it's a surprise is that we had lots of other reports of relatively healthy levels of spending over the holidays."

The index dropped by 1.2 per cent on a monthly basis last December, a surprising move at a time when unemployment is low, wages are rising and consumers seem economically healthy.

Economists in a Bloomberg survey expect the headline index to come in unchanged in January, though estimates range from another sizeable contraction to a 1.4 per cent rebound.

The Fed seems to be leaning towards the latter projection.

"So we'll be looking to see, there's also evidence, by the way, that spending has popped back up in January," Mr Powell said in the interview, which CBS noted was conducted last Tuesday. "But that's a surprisingly weak reading."

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A version of this article appeared in the print edition of The Straits Times on March 12, 2019, with the headline 'Fed keeping keen eye on retail sales data in the US'. Print Edition | Subscribe