US consumer demand has been cooled by a sluggish US labour market.
The gauge for US retail sales declined in May for a 2nd consecutive month. On an annual basis, it was only up by some 5.3%.
Meanwhile, retails sales are what the US economy mainly relies on. They account for about 70% of the entire American economy. With regard to this fact, the world’s largest economy might soon slow down.
The expected slump in the US economy seems to be likely due to cheap gasoline and cautious US consumers. Americans are unwilling to spend now as the global economy is languishing and the Eurozone crisis is getting worse.
Markets were unhappy about the news. The USD index fell below 82 points breaking its recent uptrend.
Impaired US consumer demand limits the Fed’s scope for growth stimulus and new job creation.
