According to the US Census Bureau, retail sales for the month of January fell around 0.8% month-over-month compared to an estimated 0.2%. The decline for January was the largest since March 2023. The drop in sales has many on Wall Street questioning as to whether or not the theme of consumer resiliency is losing steam.
Mastercard Economics Institute Chief US Economist Michelle Meyer joins Yahoo Finance to discuss consumer resiliency, January retail numbers, and how consumer habits may change whenever the Federal Reserve opts to cut interest rates.
Meyers outlines which sectors that rate cuts would help ease pressures:
“It’s going to provide us support for those categories that are more interest rate sensitive. So, even think about today this morning, you’ve got retail sales, but we also got the home builder confidence survey, which picked up, and has been rising now for the last several months, which shows that home builders are getting more confident about the fact that interest rates have come down. There’s still a low level of supply of homes, and they are starting to plan for greater construction and upturn in that cycle. So, an easing of monetary policy does provide support for the broader economy.”
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