Drop by 1% in US retail sales points to slowdown in private consumption

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Banca March : Mixed US consumer spending data. The most negative note was the drop in retail sales in March which points to a slowdown in private consumption. Specifically, retail sales fell -1% month-on-month after dropping -0.2% in the previous month, a figure that is worse than expected and confirms a deterioration in consumption in the first months of the year.

On the more encouraging side, the University of Michigan’s preliminary consumer confidence index was also released, which in April rebounded more than expected, rising to 63.5 from the previous 62 and above the 62.1 expected. Moreover, it should be noted that this improvement was driven both by the expectations component which rose to 60.3 from 59.2 previously, and by the current situation reading (68.6 vs. 66.3 previously).

Finally, in terms of inflation expectations, US consumers continue to hold high expectations, with 12-month forward inflation levels rising to +4.6% year-on-year, while long-term expectations remained at +2.9%.

Still in the US, industrial production also beat expectations by growing +0.4% month-on-month, two tenths of a percentage point higher than the previous month and also above expectations. A positive figure that suggests that, despite the difficulties and the drop in business confidence in the manufacturing sector, activity remained supported in Q1.

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