US Retail Sales: Consumer spending to deliver another boost to Q3 GDP – Wells Fargo
|Data released today showed retail sales rose 0.4% during August. A better than expected August retail sales report shows core consumer spending is on pace to deliver another boost to GDP growth in the third quarter according to analysts at Wells Fargo. They warn that a pumpkin smashing mood could hit in during the fourth quarter hen October tariffs bite harder.
Key Quotes:
“The headline beat was largely a function of a 1.8% increase at motor vehicle & parts dealers, where vehicles were moving off the lots faster than they have since March.”
“Sales across all other retailers, ex-autos, were unchanged, though there was plenty of variability in individual categories that offers clues as to how consumers are faring in the context of the ongoing trade war.”
“At a time when recession risk dominates most economic discussions, the strength of the U.S. consumer is among the more compelling examples of an economy that is still firing on all cylinders. Setting aside for now the fact that consumer spending can be among the last categories to contract in a downturn, the strength here is undeniable.”
“Real personal consumption (PCE) came in at a blistering 4.7% pace in the second quarter, and with a couple of months of data for the current quarter, it is now becoming increasingly apparent there is upside risk to our forecast of 2.9% PCE growth in Q3.”
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