US Retail Sales Preview: Forecasts from nine major banks, growing moderately

The US Census Bureau will release the July Retail Sales report on Tuesday, August 15 at 12:30 GMT and as we get closer to the release time, here are the forecasts of economists and researchers of nine major banks regarding the upcoming data. 

Retail Sales in the US are expected to rise 0.4% month-on-month vs. 0.2% in June. Meanwhile, sales ex-autos are expected at 0.4% MoM and the so-called control group used for GDP calculations is expected at 0.5% MoM vs. 0.6% in June.  

Commerzbank

We expect only a slight gain of 0.4% from June. At least, according to the auto industry, about 0.5% more new cars were purchased. The price of gasoline had no major impact this time, remaining at the June level after adjusting for seasonal influences.

Deutsche Bank

We expect monthly Retail Sales to rise +0.3% in July with a slightly slower rise in Retail Control (+0.2%).

TDS

We expect Retail Sales to rise for a fourth consecutive month in July after 0.2%-0.5% MoM gains in Q2. Volatile auto sales will likely add to growth while sales in gas stations were a minor obstacle. Importantly, the control group is expected to stay firm, with online sales benefiting from Amazon's Prime Day. We also look for sales in bars/restaurants to expand at a brisk pace.

RBC Economics

Retail Sales likely edged up 0.4% in July, primarily supported by sales increase in the building and auto sectors, and partially offsetting the sales drop at gas stations.

NBF

Gasoline station receipts should have decreased during the month judging by the slight drop in pump prices, but total sales may still have advanced 0.4%, buoyed by an increase in spending at car dealers. Outlays on items other than vehicles could have advanced at a similar pace, supported by higher sales in the non-store retailer segment. (Recall that Amazon Prime Day took place during the month.)

Wells Fargo

We forecast a slight pickup in July and look for sales to rise 0.3% during the month. Auto sales likely somewhat held back July sales activity after three consecutive months of strong vehicle purchases. Beyond autos, sales activity has been mixed across other retailers in recent months after an unusually strong start to the year. Households' capacity to spend is dwindling as excess liquidity normalizes and credit not only becomes harder to come by but more expensive. But the tight labor market is offering up decent wage growth when met with slowing inflation. Falling goods prices are also providing some relief to consumers in terms of purchases, with the consumer price index for goods down 0.1% in July. This suggests Real Retail Sales were likely a bit stronger, closer to 0.4% last month.

CIBC

Aggregate personal income growth appears to have slowed in July, and nominal retail sales growth was likely limited as a result, compounded by a decline in core goods prices. Total Retail Sales likely rose by 0.2% MoM, with the more important control group of sales, which excludes gasoline, autos, restaurants, and building materials, that feeds more directly into non-auto goods consumption in GDP, poised to cool to a still-respectable 0.4% MoM. We’re more pessimistic than the consensus on the headline, but we’re nearly in line with the more important control group, which should limit any market reaction.

Citi

Control Group Sales have been stronger than expected these past three months and we expect another solid 0.5% MoM increase in control group sales in July. Meanwhile, total Retail Sales should increase by 0.4% MoM with only the services category in the report likely to also show a solid increase. Solid Retail Sales data would be in line with a soft-landing narrative.

Credit Suisse

We expect Retail Sales growth to continue to show modest growth in July. We expect headline Retail Sales to grow 0.4% MoM. We anticipate auto and gas sales grew roughly in line with the rest of Retail Sales in July, so aggregates that exclude them are likely to show the same growth rate. We expect the control group to come in a touch stronger at 0.5%. Going forward, we expect Retail Sales to weaken. Auto sales may continue to show strength, but we expect sales of large durable goods related to housing, including furniture, electronics, and appliances, to remain under pressure owing to housing market weakness. More broadly, tighter financial conditions, diminishing excess savings, slowing household income growth, and the resumption of student loan debt service in 3Q are likely to weigh on consumption growth.