US: Overall retail sales were strong - Wells Fargo
|According to analysts from Wells Fargo, retail sales surged in November, giving more credence to the strong consumer confidence numbers.
Key Quotes:
“With the 0.8 percent increase in retail and food services sales in November, plus the upwardly revised October number, from 0.2 percent to 0.5 percent, the last quarter of the year is shaping up to be all that we had envisioned: this holiday season will be a merry one. Furthermore, the strength in retail sales gives credence to the strong increase we have seen for consumer confidence during the past year. That is, the U.S. consumer was highly upbeat going into the last quarter of the year.”
“The only negative reading for retail sales in November was motor vehicle & parts dealers’ sales, which declined 0.2 percent. This was expected as the increase in automobile sales that followed hurricanes Harvey and Irma as people replaced hurricane damaged cars faded away.”
“It is true that gasoline station sales were up considerably, 2.8 percent, likely due to the recent increase in gasoline prices. However, sales at furniture & home stores were up a strong 1.2 percent while purchases at electronics & appliance stores were up a strong 2.1 percent.”
“Perhaps the most market-changing release in November was the very strong control group sales print. Control sales, which are retail sales less food services, gas, automobiles and building materials, and used for the calculation of GDP, surged 0.8 percent in the month. Furthermore, October control group sales were also upwardly revised, from 0.3 percent to 0.4 percent. This means that we should expect another strong performance by the U.S. consumer during the last quarter of the year. The biggest question would probably be: where are consumers getting the money for this strong consumer performance with income growth remaining low?”
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