Brazil’s Retail Sales Drop while US Imported Inflation Declines

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Brazil’s Retail Sales Drop while US Imported Inflation DeclinesBrazil’s retail sales plunged by the biggest margin in over two years in June, against expectations of an increase. The sales tumbled 0.7 percent after surging 0.3 percent a month earlier, reported the national statistics agency in Rio de Janeiro.

Sales dropped for the first time since April after the country started hosting the World Cup soccer extravaganza. Economists in a Bloomberg News survey had expected the sales to increase 0.4 percent.

Sales of furniture and appliances declined 2 percent, down from a growth of 1 percent in May. Office equipment and materials plunged 4.2 percent after gaining 1.5 percent in May. Retail sales of food, tobacco and beverages jumped 0.6 percent, compared with a decline of 0.1 percent in May.

Brazil’s consumer prices jumped 6.52 percent in June from a year ago, way past the government’s maximum ceiling, before edging slightly lower to 6.5 percent in July. The central bank has set an inflation target of 4.5 percent, plus or minus 2 percentage points.

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The nation’s unemployment rate stood at 4.9 percent in April, with data for May and June still unavailable after the staff of the country’s statistics office went on a strike. The strike ended this week after the union agreed on a return-to-work formula with the government.

Meanwhile, US imported inflation dropped in July after a drop in petroleum prices made up for the surging food prices, said the Labor Department on Thursday. The import prices fell 0.2 percent in July after jumping 0.1 percent the previous month. However, the prices rose 0.8 percent in the year through July.

Economists surveyed by Reuters had expected the import prices to decline 0.3 percent in July. Imported petroleum prices plunged 1.2 percent last month, the most since November, after jumping 1.1 percent in June. Imported food prices surged 1.0 percent after dropping 1.6 percent the prior month. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com