US Retails Sales: February likely to show a modest decline – Wells Fargo
|On Tuesday, economic data to be released includes the US retails sales report for February. Analysts at Wells Fargo, forecast a decline of 0.1% while market consensus point to a -0.5% reading. In January sales jumped 5.3%.
Key Quotes:
“We expect some modest payback in the February retail sales data after a surge in spending the prior month. Direct checks from the December fiscal relief package burned a hole in consumers' pockets in January and resulted in the largest spending gain since June for most retailers.”
“When we get the retail spending data for February next week, we expect some payback is in order. Autos likely will play a large part in the decline in sales from January based on the pullback in vehicle sales data for the month. In fact, excluding autos we expect sales rose 0.2%. Some weakness may also show up in the restaurant component, based on the high-frequency data from OpenTable on seated diners.”
“If consumption comes in better-than-expected in February, the rapid improvement in the virus situation and optimism of an improving economic backdrop amid further stimulus is already boosting consumption. A worse print could suggest even more payback from the January spending surge than we forecast. The bottom line is, with another round of fiscal stimulus passed this week and many households set to get another round of direct checks that are more than double what they received in January, we expect spending to receive another jolt in just a few months time.”
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