U.S. retail sales mixed, but for the most part disappointing – Wells Fargo

Analysts at Wells Fargo note that data released today showed that retail sales in the U.S. rose 0.2% in November, below expectations

• “This is not the report we needed for our upbeat holiday sales forecast to be accurate. November Retail sales were mixed, but for the most part disappointing. The headline increase was just 0.2%, well short of the 0.5% expectation, although the prior month’s figures were revised higher, which softened the blow. Auto sales rose 0.5%, the second straight monthly increase. But when you strip away autos and gas, retail sales were flat on the month despite the consensus-expectation of a 0.4% gain.
• Remember that Thanksgiving came late this year. So late that the number of days between Thanksgiving and Christmas cannot be any less. On that basis, it stands to reason that this year, in particular, December will be the more critical month. Cyber Monday did not arrive until December 2.
• Last December retail sales posted the largest one-month decline since the recession. For our holiday sales measure, it was the largest one-month plunge ever recorded. Those low base effects alone set this December up for a considerable year-over-year gain. We do acknowledge there is some downside around this forecast, but even if holiday sales are flat in December, we are poised for a 4.4% gain in 2019 holiday sales.”