US Retail Sales: A bit weaker than expected – Wells Fargo

FXStreet (Córdoba) - Taking all into account, today’s report on retail spending was a bit weaker than most analysts had expected notes Jay Bryson, Global Economist at Wells Fargo. He sees that consumer spending growth will likely remain solid.

Key Quotes:

“Retail sales numbers can bounce around on a monthly basis, so it may be more instructive to look at underlying trends. In that regard, retail spending generally has been rather solid in recent months. Excluding motor vehicles and gasoline, two components of spending that can be volatile on a monthly basis, shows that retail sales have grown about 5 percent over the past three months on an annualized basis. Although this measure of spending has decelerated a tad in recent months, the underlying growth pace is generally solid.”

“The decline in gasoline prices may have helped to depress nominal spending growth, but it appears that real (i.e., inflation adjusted spending) is holding up well.”

“Although today’s report may put some downside risk into our projection of 3.7 percent annualized growth in real personal consumption expenditures in the third quarter, consumer spending generally looks to have made another large contribution to overall GDP growth in the third quarter.”

“With overall consumer prices essentially flat in year-over-year terms, this modest increase in income translates into solid growth in purchasing power. As long as the labor market does not falter, consumer spending growth likely will remain solid”.
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