What exactly is the problem?

Is it the U.S. economic data that's the issue, or is it the U.S. economists and analysts?

The United States has so many top economists, and Wall Street is home to so many strategists and analysts, yet they have recently felt as if they might as well be street fortune-tellers, because with one heavy data release after another, they find that the actual figures are far from the market's expectations.

The U.S. has released another key indicator known as the "terrifying data," which is the retail data for January, and once again, the data is significantly different from what the market anticipated.

According to the latest report provided by the U.S. Department of Commerce, retail sales in January fell sharply by 0.8% month-on-month, while the market had expected a decline of 0.3%. This significant drop in January is the largest fall in nearly a year. However, for the time being, due to the lower base last year, there is still a year-on-year increase of 0.6%.

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Given that two-thirds of the U.S. economy's total volume comes from consumer contributions, and with prices rising higher and higher and credit interest rates remaining high, it is clear to everyone that consumer spending is hard to sustain in the long term under the pressure of these two factors. Now, a significant drop has occurred.

However, some analysts have offered explanations, attributing the decline to holiday factors that concentrated consumption in December, and also to the cold weather in January, which reduced spending.

But for these analysts, no matter what phenomenon occurs, they can always find seemingly reasonable explanations.

If consumption begins to decline significantly, will the U.S. economy face major problems in 2024?

After the release of this data, some U.S. officials remain optimistic. The reason is that real wages are still growing, and the employment rate is quite good. The latest data released by the Department of Labor shows that the number of initial jobless claims for the previous week decreased by 8,000 compared to the week before.Officials believe that the continued increase in the employed population is sufficient to ensure U.S. consumption and also to maintain the expansion of the U.S. economy.

However, for the capital market, this undesirable bearish data has been taken as a positive signal, with some even hoping it could be a lifeline.

Following the previous blow from CPI, which led to a decline in the three major U.S. stock indices, the Dow Jones Industrial Average actually rose by 348 points after the release of yesterday's retail data, and the two-day consecutive increase has wiped out the previous decline. The S&P 500 index once again surpassed 5,000 points and closed above the 5,000-point mark.

It is clear that the capital market is looking forward to the underwhelming retail data, hoping it can help the Federal Reserve make a rate cut decision more quickly.

Strangely, however, the probability shown by the Federal Reserve's observation tool indicates that the chances of a rate cut in March and May in the U.S. have not changed much, suggesting that the Federal Reserve is unwilling to react to the retail data.