US Retail Sales Preview: Forecasts from five major banks, consumer activity regaining steam

The US Census Bureau will release the January Retail Sales report on Wednesday, February 16 at 13:30 GMT and as we get closer to the release time, here are the forecasts of economists and researchers of five major banks regarding the upcoming data. 

Retail Sales are expected to rise by 1.6% on a monthly basis in January following December’s disappointing decrease of 1.9%.

TDS

“We look for retail sales to rebound strongly in January (TD: +2.0% MoM), following December's sharp 1.9% decline. Spending was likely aided by a surge in auto purchases and an improvement in restaurant sales, with the latter likely recovering from the Omicron impact. We also expect control group sales to gain some ground again following two consecutive declines in Nov-Dec.”

SocGen

“Consumer spending should be regaining some of its steam – at least for goods. In December spending on goods plunged. Yes, these are seasonally adjusted views, as it was a soft month. We expect a bounce in retail sales in January of +2.4% after 1.9% MoM plunge in December. Spending on new motor vehicles has already been reported to be up sharply”

NBF

“Car dealers should have contributed positively to the headline number, as auto sales surged in the month. Gasoline station receipts, for their part, may have decreased slightly judging from a marginal retreat in pump prices. All told, we expect headline sales to have jumped 2.4% on a monthly basis. Spending on items other than vehicles may have risen at a slightly weaker pace, rising 1.6%.”

CIBC

“Retail sales likely rebounded in January, but the expected 2.3% monthly growth will largely reflect higher prices and auto sales. The drop in gasoline prices will have held back receipts at gas stations, while restaurant reservations tapered off as Omicron spread, suggesting a more modest 0.8% gain in ex-auto spending. Sales in the control group (ex. autos, gasoline, restaurants, and building materials) could have risen by 1.0%, but that would entirely reflect price gains, as demand for goods is likely becoming saturated given that real spending on goods was still 4% above its pre-pandemic trendline as of December. We are less optimistic than the consensus on the control group which could be negative for the greenback and cause bond yields to fall.”

Wells Fargo

“We look for retail sales to bounce back and rise 2.1% in January.”