US Retail Sales Preview: Forecasts from seven major banks, big boost in October

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

Retail Sales in the US are expected to rise by 1% following a stagnant September. Meanwhile, while sales ex-autos are expected at 0.5% vs. 0.1% in September. The so-called control group used for GDP calculations is expected at 0.3% MoM vs. 0.4% in September.  

RBC Economics

“A jump in US unit auto sales in October is flagging a solid 1% increase in US Retail Sales.” 

NBF

“Headline sales could have sprung 1.1% in the month. Spending on items other than vehicles may have been weaker, advancing 0.5%.”

Commerzbank

“We expect Retail Sales to rise by 1.2% from September, which would also signal a significant gain in real terms. This should make it clear that the US economy is still not in recession. We do not expect this to happen until the beginning of 2023 anyway, with consumer spending, which accounts for a good two-thirds of GDP, holding up better than we expected until recently.”

TDS

“We look for Retail Sales to accelerate in October by 1.2%, following a largely sideways move in September. Spending was likely boosted by a significant increase in auto sales and the first gain in gasoline station sales in four months. Importantly, control group sales likely rose firmly at 0.5% MoM, while those for bars/restaurants probably retreated following two months of expansions.”

CIBC

“A surge in car sales as supply chain issues continued to fade, along with higher gasoline prices, will be behind a likely solid 1.3% rise in total Retail Sales in the US in October. That would also include higher demand for dining out, as restaurant reservations rose, which could have masked weakness in sales of building materials, tied to the deterioration in the housing market. Higher spending on services, combined with the rise in gasoline prices, could have squeezed consumption in discretionary goods categories, resulting in a tepid 0.1% increase in the control group of sales (ex. autos, gasoline, restaurants, and building materials). We are above the consensus on the headline, and below on the control group, which could cancel out and result in little market reaction.”

Wells Fargo

“We forecast that Retail Sales increased 1.0% in October, which translates to about a 0.5% real gain.”

Citibank

“We expect a strong increase in topline retail sales of 1.4% MoM in October. The strength is highly concentrated in the motor vehicles category as unit sales for new autos jumped by over 11% MoM in October. There could be some more upside from autos in the near term as supply chain issues have been easing. Gasoline sales are also contributing a significant boost this month as gasoline prices increased on average in October. We expect a solid 0.5% MoM increase in restaurant sales. With strength concentrated in autos and gas, we expect a modest 0.1% MoM increase in control group sales for October as categories such as apparel, electronics and general merchandise are likely to be a drag this month.”