US Retail Sales Preview: Forecasts from six major banks, can the US consumer remain strong?

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

US Retail Sales data are set to show no improvement in the overall demand. But the Control Group is what matters, and here, expectations are high. A 0.5% increase is expected.

Commerzbank

“The drop in gasoline prices is lifting consumer sentiment, which is why the usual sentiment indicators recovered noticeably in August. We expect retail sales to rise by 0.4% this month (consensus +0.3%).”

TDS

“We look for retail sales to lose speed in August (-0.5%), following a flat MoM print in July. Spending was likely dented by a sharp drop in gasoline station sales and another retreat in auto sales. We also look for slowing in control group sales to 0.2% following a string of firm MoM increases. Sales in the eating/drinking segment likely fell for the first time in several months.”

NBF

“Car dealers likely contributed negatively to the headline number, as auto sales cooled during the month. Gasoline station receipts, meanwhile, could have declined steeply judging from a drop in pump prices. All told, headline sales could have edged down 0.1% in the month. Spending on items other than vehicles may have been weaker, retreating 0.3%.”

Deutsche Bank

“We expect a +0.6% MoM reading, up from last month's flat print. As gasoline prices continue their downward trend, whether this assuages the inflationary pressures on consumer spending will be important.”

CIBC

“Lower gasoline prices and unit auto sales will weigh on total retail sales in the US in August, but higher volumes at restaurants could have provided a partial offset, leaving total sales down by 0.2% on the month. While the drop in gas prices will have left money on the table for spending elsewhere, it’s likely that that was directed towards services, rather than other goods, where excesses in spending remain. Moreover, the surge in online sales seen in July is unlikely to have been repeated in August, suggesting that the control group of sales (ex. gasoline, autos, building materials, restaurants) likely posted a lacklustre 0.2% advance, a likely contraction in volume terms.”

Wells Fargo

“Retail sales were flat in July, but after accounting for price changes, we estimate real sales rose 0.6%– the first volume gain in three months. Nominal sales likely dipped 0.2% in August, held down by a double-digit decline in gasoline prices last month and a slight decline in vehicle units sold. Savings at the pump, however, are likely to have supported sales in other categories as back-to-school shopping went into full swing. We look for sales ex-autos and gas to post another decent gain for August. Consumer spending has shown resilience this summer. However, with gas prices falling more slowly, borrowing rates rising and the jobs market cooling, we expect the staying power of the consumer to fade over the remainder of the year. Retail spending is likely to feel the pullback to a disproportionate extent after many goods purchases were pulled forward during the pandemic and spending on experiences was put on hold.”