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USD Core Retail Sales m/m, Sep 16, 2025

Core Retail Sales Soar in September 2025: What This Means for the USD and the US Economy

Breaking News: On September 16, 2025, the Core Retail Sales m/m for the USD hit a surprising 0.7%, significantly exceeding the forecasted 0.4% and dwarfing the previous reading of 0.3%. This high-impact economic indicator suggests a robust increase in consumer spending and has significant implications for the strength of the US dollar.

Let's delve deeper into why this figure is so important and what it signifies for the US economy and currency markets.

Understanding Core Retail Sales: A Key Indicator of Economic Health

The Core Retail Sales m/m, or month-over-month, report, released by the Census Bureau, measures the change in the total value of sales at the retail level, excluding automobiles. Often referred to as "Retail Sales Ex Autos," this metric strips away the volatility inherent in automobile purchases, providing a clearer picture of underlying consumer spending trends.

Why exclude automobiles? As the accompanying FFnotes highlight, automobile sales account for roughly 20% of overall retail sales. However, these sales tend to fluctuate dramatically due to factors such as manufacturer incentives, new model releases, and consumer sentiment swings regarding large purchases. Including these volatile figures can obscure the true direction of consistent consumer spending.

This report is released monthly, typically about 16 days after the end of the reporting month. With the latest release on September 16, 2025, covering the month of August, investors and economists are now keenly analyzing the implications of this robust growth. The next release is scheduled for October 16, 2025, which will offer further insights into the ongoing trends in consumer spending.

Why Traders Care: Consumer Spending Drives the Economy

The "WhyTradersCare" section encapsulates the critical importance of this indicator: "It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity." This statement is the bedrock of why Core Retail Sales commands so much attention. A healthy economy hinges on consumers opening their wallets and spending money on goods and services. When consumer spending weakens, it signals a potential slowdown or even recession.

Therefore, a rising Core Retail Sales figure, like the 0.7% seen in the latest release, suggests a confident and healthy consumer base, fueling economic expansion. Conversely, a declining figure raises concerns about economic contraction.

The September 16, 2025, Data in Detail: A Positive Sign for the USD

The significant outperformance of the September 16, 2025, Core Retail Sales release – the 0.7% actual versus the 0.4% forecast – is undeniably positive for the USD. According to the "UsualEffect," an "Actual" value greater than the "Forecast" is generally considered good for the currency. This is because strong retail sales data often signals that the Federal Reserve might consider tightening monetary policy, such as raising interest rates, to curb potential inflation. Higher interest rates typically attract foreign investment, strengthening the value of the USD.

The fact that the actual figure also surpasses the previous reading of 0.3% further reinforces the positive outlook. This suggests that the momentum of consumer spending is not just exceeding expectations but is also building compared to the previous month.

Interpreting the Implications: Beyond the Headline Number

While the headline number is undoubtedly encouraging, a more nuanced analysis is required. Factors to consider include:

  • Underlying Drivers: What specific sectors contributed most to the increase in core retail sales? Was it driven by discretionary spending on items like electronics and apparel, or was it more focused on necessities like food and household goods? The composition of the increase can provide further insights into consumer confidence and economic strength.

  • Inflationary Pressures: A strong increase in retail sales can sometimes lead to concerns about rising inflation. If demand outpaces supply, prices may rise, potentially eroding consumer purchasing power in the long run. The Federal Reserve will closely monitor inflation data alongside retail sales to determine the appropriate course of monetary policy.

  • Comparison to Other Economic Indicators: Core Retail Sales should be viewed in conjunction with other economic data, such as GDP growth, employment figures, and inflation reports, to paint a more complete picture of the US economy.

Conclusion: A Strong Signal, But Cautious Optimism is Key

The September 16, 2025, Core Retail Sales release presents a strong positive signal for the US economy and the USD. The substantial increase in core retail sales suggests robust consumer spending and reinforces the notion of a healthy and growing economy. However, it's crucial to maintain cautious optimism. Monitoring the underlying drivers of this increase, potential inflationary pressures, and other key economic indicators will be essential to fully understand the long-term implications of this latest release. Traders and investors should carefully analyze the data and consider the broader economic context before making any significant investment decisions. The upcoming October 16, 2025, release will provide further validation of this trend and help solidify the economic outlook.