Retail Sales jumped in December as the holiday shopping season came to a close.
The concern of the Fiscal Cliff didn’t keep as many people out of the malls as some may have expected.
Although, the .2% increase was modest in the light of the employment market improvement. (We could have expected higher figures in result of correlation with the job market improving.) The Fiscal Cliff didn’t keep everybody out of the shopping plaza’s but it’s effects could soon be seen more evidently.
As new payroll taxes come into place on American households, it’s a possibility that retail sales will not be positive in the coming quarter.
“Until we see a big increase in employment growth, it’s going to be tough for consumer spending to pick up. The consumer is going to struggle a bit in the first quarter while adjusting to the new reality of the higher payrolls tax.” -Josh Dennerlein, Economist at Bank of America Corp. (According to Bloomberg)
The payroll tax increase is going to reduce a paycheck about $83 per month for those who earn a salary of $50,000 according to Reuters.
Social security has went from 4.2% to 6.2%. If you live in the U.S., you’ll be seeing this reality when you open your first paychecks of the year.
The Forex market is showing some significant U.S. Dollar strength today. The Dollar is not strong against the Yen though. Traders are likely looking to jump back in short on the Yen when the USD/JPY hits a legitimate support level.
What are your thoughts on the new Pay Roll Tax? Let us know below!
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