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12 Mar 2015
US retail sales might stage a mild rebound – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, previews the US retail sales data release, and further discusses its divergence with consumer spending.
Key Quotes
“..retail sales data are based on values so the plunge in gasoline prices has contributed to a drop in the value of sales in general. The personal consumer spending number is a volume figure so it strips out the effect of price changes. Secondly, retail sales accounts for only around 43% of total consumer spending in the US.”
“Given the relative strength of the US economy and its jobs market this should mean that consumer spending should be outperforming retail sales.”
“We suspect that this divergence between the retail sales numbers and personal consumer spending will continue, especially in YoY terms.”
“Even so, today’s MoM retail sales growth rate may not be that great (we forecast a 0.6% rise, which is a very mild rebound after a 0.9% fall in December and a 0.8% drop in January – there may be some seasonal adjustment issues behind these surprisingly weak numbers).”
“The weekly Johnson Redbook survey has suggested the core figure may be weak while the volume figures from the auto makers was also down heavily. Bad weather will have played its part here.”
“However, gasoline station sales may actually rise marginally given the 10% increase in prices since January on the back of the modest rise in oil prices.”
Key Quotes
“..retail sales data are based on values so the plunge in gasoline prices has contributed to a drop in the value of sales in general. The personal consumer spending number is a volume figure so it strips out the effect of price changes. Secondly, retail sales accounts for only around 43% of total consumer spending in the US.”
“Given the relative strength of the US economy and its jobs market this should mean that consumer spending should be outperforming retail sales.”
“We suspect that this divergence between the retail sales numbers and personal consumer spending will continue, especially in YoY terms.”
“Even so, today’s MoM retail sales growth rate may not be that great (we forecast a 0.6% rise, which is a very mild rebound after a 0.9% fall in December and a 0.8% drop in January – there may be some seasonal adjustment issues behind these surprisingly weak numbers).”
“The weekly Johnson Redbook survey has suggested the core figure may be weak while the volume figures from the auto makers was also down heavily. Bad weather will have played its part here.”
“However, gasoline station sales may actually rise marginally given the 10% increase in prices since January on the back of the modest rise in oil prices.”