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12 Mar 2015
US Feb retail sales disappoints – ING
FXStreet (Barcelona) - Rob Carnell of ING, reviews the US retail sales data release, noting that although the numbers were disappointing due to weather related issues, an optimistic interpretation can be made as a nice bounce may be seen in next month’s release.
Key Quotes
“For real time trackers of the US economy, the latest retail sales data, together with a number of other activity indicators, suggests a sharp slowdown in GDP from 4Q14. Retail sales fell 0.6%mom, the third substantial monthly fall in a row, making it hard to explain away in terms of bad weather or other transitory excuse.”
“We had expected the 10% rise in gasoline prices to deliver more of a lift than the 1.5%mom gain reported. A 2.3% decline in building materials may be weather related, but then it is hard to square that with a 2.3% rise in sporting goods (skis?). Falls in General merchandise and department stores add to a picture of miserable retail spending.”
“Still, the boost to disposable incomes from falls in gasoline prices ought to emerge at some point soon, and with March weather reverting to trend, if there is a weather element to recent retail and other activity softness, then pent up spending on such items as autos could deliver a nice bounce next month.”
“If this does not happen, then strong labour markets alone may not be enough to persuade the Fed to deliver the June rate hike the market has been pricing in and that we have been forecasting. And one wonders also if the labour market, as a lagging indicator of the rest of the economy, is in fact just in Wile-e-coyote mode, waiting to drop.”
“For the time being, we will cling to an optimistic interpretation of the data. But we need to see some better activity data soon if we are not to consider throwing in the towel and joining the pessimists.”
Key Quotes
“For real time trackers of the US economy, the latest retail sales data, together with a number of other activity indicators, suggests a sharp slowdown in GDP from 4Q14. Retail sales fell 0.6%mom, the third substantial monthly fall in a row, making it hard to explain away in terms of bad weather or other transitory excuse.”
“We had expected the 10% rise in gasoline prices to deliver more of a lift than the 1.5%mom gain reported. A 2.3% decline in building materials may be weather related, but then it is hard to square that with a 2.3% rise in sporting goods (skis?). Falls in General merchandise and department stores add to a picture of miserable retail spending.”
“Still, the boost to disposable incomes from falls in gasoline prices ought to emerge at some point soon, and with March weather reverting to trend, if there is a weather element to recent retail and other activity softness, then pent up spending on such items as autos could deliver a nice bounce next month.”
“If this does not happen, then strong labour markets alone may not be enough to persuade the Fed to deliver the June rate hike the market has been pricing in and that we have been forecasting. And one wonders also if the labour market, as a lagging indicator of the rest of the economy, is in fact just in Wile-e-coyote mode, waiting to drop.”
“For the time being, we will cling to an optimistic interpretation of the data. But we need to see some better activity data soon if we are not to consider throwing in the towel and joining the pessimists.”