US Retail Sales Preview: Forecasts from seven major banks, retreat in consumption for first time since March

The US Census Bureau will release the October Retail Sales report on Wednesday, November 15 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. 

Economists expect US Retail Sales to have declined by 0.3% in October. In September, the volume of sales increased by 0.7%. Meanwhile, Sales ex Autos are expected at 0.0% month-on-month vs. the prior release of 0.6%. 

Deutsche Bank

We expect weak unit motor vehicle sales to encourage a -0.4% print on the headline (from +0.7%), with the same forecast for Sales ex Auto (from +0.6%) due to lower gasoline prices. We expect Retail Control, which goes into GDP, to be only +0.1% (from +0.6%). This grew at an annualised +6.8% in Q3. So potentially a big step down.

TDS

We expect Retail Sales to retreat (-0.3%) for the first time since March, following much stronger gains over Q2/Q3. Volatile auto and gas station sales will likely be the main culprits behind weaker growth, while the key Control Group is expected to lose momentum. We also look for sales in bars/restaurants to decelerate, as services spending is likely to start Q4 on a weaker footing.

RBC Economics

We anticipate US Retail Sales to edge down 0.3% in October. Gasoline station sales likely fell on lower prices.

NBF

Judging from previously released data, motor vehicles and parts dealers as well as outlays at gasoline stations could have contributed negatively to the headline figure. All told, we expect total sales to have contracted 0.1%. Ex Auto outlays could have been a tad stronger, remaining unchanged month on month.

SocGen

We look for a 0.3% decline in October Retail Sales that captures a modest reversal in the 1% gain of September and a 4.0% drop in gasoline prices. 

CIBC

High-frequency credit card spending data point to a further pick up in the Retail Control Group in October, which we think will be 0.3% MoM. Weak auto sales and gas prices in October, however, will likely cause the headline advanced reading to show a contraction of -0.2% MoM. A reading above our forecast and the steadying of the saving rate at a very low level would challenge’s the Fed’s theory that the supply side of the economy is partly responsible for surge in activity. 

Wells Fargo

We forecast Retail Sales declined 0.2% in October. Consumers who pulled their holiday spending forward to take advantage of Amazon's Prime Big Deal Days and Target's Circle Week last month pose an upside risk to our call.