US: Retail sales fell sharply as consumers became more cautious – CIBC

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Retail Sales dropped 1% in March in the US, a larger-than-expected contraction. Despite those numbers, analysts at CIBC still see the Federal Reserve raising rates in May, for the last time.

“US retail sales fell sharply in March as consumers became more cautious, adding to other recent data releases that have signaled a deterioration in activity.”

“The Fed is looking for definitive signs of a cooling in activity and this print is a step in the right direction, but with sales volumes in the control group still 5.8% above their pre-pandemic trend level, this won’t prevent a 25bp hike at the May FOMC.”

“This data adds to signs of a deterioration in activity that will likely intensify in the second quarter, but the progress in cooling activity won’t be enough to prevent a final 25bp Fed hike in May.”

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