HG MARKETS:

Retail sales in the United States increased in July by a greater amount than anticipated, indicating consumer spending activity resilience ahead of the Federal Reserve meeting next month. According to data released earlier on Thursday by the Commerce Department, retail sales increased by 1% last month, moving up from a reading that remained unchanged in June. Retail sales, which are mostly about goods and are not adjusted for inflation, were expected to rise by 0.4%, according to economists. After increasing by a revised lower 2.0% in June, retail sales increased by 2.7% on an annual basis. Since consumption accounts for approximately two-thirds of U.S. economic growth, this data may have an impact on the outlook for the economy as a whole. It may also have an impact on how the Federal Reserve approaches potential interest rate cuts this year. Additionally, a decline in the number of Americans submitting new applications for unemployment benefits last week bolstered concerns regarding the persistence of a gradual softening of the labor market.

 The Labor Department reported that initial claims for state unemployment benefits decreased by 7,000 to a seasonally adjusted 227,000 for the week ending August 10, as opposed to the expected rise to 236,000. The first-time claim drop of 16,000 to 234,000 last week was the largest in about 11 months, which was a welcome change from the sharp jump in jobless claims the week before. After raising its policy rate by 525 basis points since 2022, the Fed has maintained its benchmark overnight interest rate in the current range of 5.50 percent to 5.60 percent since July. However, the likelihood that the U.S. central bank will begin a rate-cutting cycle next month has increased due to recent benign inflation data, signs of a cooling labor market, and slowing economic growth.