US: Retail sales eased in October but remained solid - Wells Fargo
|Excluding categories impacted by weather events, US retail sales in October remained quite strong which bodes well for Q4 personal consumption, mentioned analysts from Wells Fargo.
Key Quotes:
“Retail and food services sales rose 0.2 percent in October and September’s surge was revised higher to 1.9 percent. This was stronger than expected, as consensus had penciled in a flat month of sales as the boost from gas prices, building supplies and auto sales associated with the hurricanes eased from September. Control group sales—which exclude autos, food, gasoline and building materials were less impacted by the hurricanes in September, and were up a stronger 0.3 percent in October. Control group sales are up a solid 3.5 percent average annualized rate over the past three months, which suggests spending has solid momentum going into the last quarter of 2017.”
“Auto dealers’ sales continued to increase in October, rising 0.8 percent after September’s 4.6 percent surge. Vehicle replacement following the hurricanes have certainly provided a boost to the category, which saw sales rise 4.5 percent over the year on a three month average basis.”
“Retail sales were up for most categories in October, which is reassuring as a gauge of consumer spending momentum in the start of Q4. Control group sales, which go into the calculation of personal consumption expenditures in GDP, were up more than the headline in October because they were not adversely impacted by the comedown in gasoline prices. They also strip out volatile spending on food, auto and home improvement stores, and are thus a good gauge of underlying consumption demand. Control group sales saw momentum increase in October, which is good news for retailers going into the holiday season and for Q4 GDP calculations if this strength holds up.”
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