During September 2015, US retail sales increased by 0.10% over August. At the time, declines registered in 54% of the major categories, with the biggest decline coming from service stations at 3.2%. This was largely due to plunging fuel costs led by oversupply, weak demand and fierce competition between WTI and OPEC producers. In fact, retail sales recorded their sharpest declines of the year since January (autos excluded). When automobile sales are factored in, the 1.7% increase marks the strongest advance since May 2015. A quick glance at the graphic is none too flattering. Anaemic growth in US retail sales is the order of the day, and the upcoming announcement for October’s US retail sales figures will be made on Friday the 13th at 1:30 PM.

The consensus estimate for October is 0.3%. While uncomplimentary, this would be a strong indication that the US economy is on track for a solid recovery leading into the holiday shopping season. Market analysts will be carefully eyeing the US retail sales growth figure as it will provide further impetus to calls for a December 15/16 rate hike by the Fed FOMC. Already we have seen other metrics providing a favourable platform for a December lift off. These include the drop in unemployment from 5.1% to 5%, and a non-farm payrolls figure that shattered expectations with massive increases in employment.

The announcement on Friday will also be coupled with the US retail sales figure year-on-year for October. In September, retail sales in the US increased by 2.40% over the same month a year ago. The month-to-month increases in retail sales have been positive throughout 2015, which is notable given that there is increased spending in the retail sector. The consensus estimate for the release of Friday the 13th data is 2.2% for October 2015. This lends itself to an inflationary impact on the economy, which is coupled with a real increase in average wages ($0.09 per hour to $25.20, with average wages growing by 2.5% in 2015). These are all positive signs for the Fed’s inflation target range of 2%. Recall that the Federal Reserve Bank is seeking a confluence of economic data that all points in the same direction: strong growth. Then, the Fed will enact quantitative tightening policies by way of interest-rate hikes, possibly even Treasury sales to decrease the US monetary supply to tighten up the economic situation. Quantitative easing was hugely successful in the US since the 2008 economic meltdown, but conditions are ripe for the first rate hike in 6 years.