April retail sales rose by 0.9%, adding extra support to the U.S economy
The wall street indexes close lower Tuesday as investors fear the long-term effect of the federal reserve tightening policy. The S&P and Nasdaq are heading for their seventh week of losses, making it one of the first quarter in stock market history.
The Federal Reserve is expected to start shrinking its bond-buying abilities by June and reduce its balance sheet. Yet, in the long term, some experts believe that high-interest rates and reducing balance sheets are worthless plans.
Last Thursday, the tech-heavy Nasdaq 100 declined by 27% this year, its biggest fall since the bust of 2000. The Chinese lockdown and rising cases of the new COVID variant have become a tremendous problem for tech stocks. Investors feel the possibility of a coming recession due to rising oil prices and supply chain shortages. According to JB Morgan data, almost 50% of the Nasdaq stocks are down by at least 50%. That represents a new and very difficult challenge for this high-growth stock to rebound. That includes mega-caps such as Netflix, Apple Inc., Meta, Amazon, and Google.
However, in the United States, consumers proved to be an important factor in the country’s economic and growth sustainability. Inflation reached an all-time high over the past 40 years” 1982″ with an 8.5% year-to-year increase.
Yet, April retail sales rose by 0.9% despite fears of an economic growth slowdown and increasing prices.
At a global level, retail sales declined slightly compared to January and March, but in the United States, consumer spending increased in April. According to the latest giving data, restaurant, car, food, and retail sales jumped by 0.9%. The boost in sales was probably a direct result of income increase, which was estimated at.4% in the private sector. plus, the rebound in labor work and the decline in last month’s jobless claims.
The rise in consumer spending came at a critical time since the U.S economy was hoping to get some support. The Federal Reserve is still marching with its motion to fight inflation, but the consequences will become tremendous.
Experts call the continued decline in the S&P and Nasdaq indexes signs of economic woes, and it appears to be that way by giving a second thought.
It is obvious that the Federal Reserve’s attempt to shrink inflation by raising interest rates has started somehow late. Some parties started blaming the Federal Reserve and its chairman, Jerome Powell, for the slow and poor decision.
Major banks in the U.S declared massive losses in the first quarter, simply because rising interest rates and consumer borrowing were somehow bad for business. The housing market is burning up and the gap is increasing. Home sales declined and mortgage rates increased to their highest level in decades. However, the conflict between those who support the FED’s interest hike attempt and those who do not are getting larger. But, to give the FED some credit, the interest hikes were responsible for supporting a stringent labor market and increasing consumer demand.
So, till now, all things seem to look a bit foggy,