US Retail Sales Miss / Fat Finger
Last month there was a significant drop in US consumer spending, signalling that the tight labour market and slowing inflation that kept spending levels high might be starting to crack. The US Census Bureau saw a 0.8% decrease in advance retail sales for the month, following an adjustment in December's figures to a 0.4% increase, from +0.6%. The decline was larger than the -0.2% forecast by economists.
Notably, sales in the building materials and garden equipment sector were weak, plummeting 4.1%. Sales in miscellaneous stores dropped by 3%, and sales related to motor vehicles and parts retailers decreased by 1.7%. Additionally, gas station sales fell by 1.7% amid declining fuel prices. Conversely, restaurants and bars experienced a 0.7% sales increase.
The control-group sales, used to calculate gross domestic product, also dropped 0.4% in January, the first decline since March. The consensus was for a 0.2% rise. The measure excludes food services, auto dealers, building materials stores and gasoline stations.
Also, we’ve all ‘fat-fingered' at some point in our lives, with differing results, from a raised eyebrow whilst reading the Daily Update, to moving markets. Earlier this week, the typo in the online taxi service Lyft’s earnings press release really did move its stock price, to the tune of a 65% rally.
The company said the profit margin was expected to grow this year by 500 basis points, so 5%, when it meant to say 50 basis points, 0.5%. The errant zero sent the stock soaring in extended trading after hours only to fall when the company corrected the mistake.
Taking responsibility for the error, David Risher, Lyft’s CEO said: “This was a bad error, but it was one zero in a press release.” Luckily for Risher, the rest of the news in the earnings report was also good, with the company’s stock rallying over 55% since release.
If you would like to receive The Daily Update to your inbox, please email markets@epicip.com or click the link below.