US: Expect 0.7% increase in core retail sales in February - Nomura
|Analysts at Nomura expect a 0.7% m-o-m increase in US core (“control”) retail sales in February.
Key Quotes
“The labor market likely remained strong in the month with continued wage growth. Further, the recent tax cuts appear favorable for consumer spending in the near term. This, combined with elevated consumer sentiment as suggested by most incoming consumer surveys, indicates continued momentum in consumer spending. However, we expect some drag from sales at auto and auto parts dealerships. Total light vehicle sales slowed in February.”
“We think consumers’ purchase of light vehicles will slow further considering rising interest rates and tight burrowing conditions on auto loans. Sales at building material stores, which tend to be volatile, could rebound in February after falling 2.4% in January. The sales of home improvement and building material supplies may have been temporarily lowered by inclement weather in January. Finally, reflecting a decline in retail gasoline prices in February, we expect sales at gasoline stations to fall. Taken altogether, our forecast for February retail sales excluding autos and parts is a 0.6% m-o-m gain. Our forecast for total retail sales is a 0.5% m-o-m increase.”
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