US Retail Sales Preview: Forecasts from six major banks, hot gains for retailers

The US Census Bureau will publish the Retail Sales report for October on Tuesday, November 16, at 13:30 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 US Retail Sales data. Retail Sales are forecast to rise 0.7% in October, as in September. Sales ex-autos are expected to gain 0.7% and the Control Group is predicted to climb 0.4%. 

In the opinion of FXStreet’s Analyst Joseph Trevisani, dollar and Treasury rates will rise regardless of sales results.

ING

“Retail sales will be lifted by 1.5% MoM thanks to the 6% MoM increase in new vehicle units sold – the first increase since April – while gasoline station sales will be boosted by the surge in gasoline prices. Elsewhere, rising household income and wealth should mean decent gains although we continue to expect a rebalancing trend away from the purchase of physical things that show up in retail sales, towards services, which are picked up in broader consumer spending.”

NBF

“Car dealers may have once again contributed negatively to the headline number as the sector continued to suffer from chip shortages. Spending in some high-contact categories (e.g. eating/drinking establishments), on the other hand, may have strengthened on an improvement of the epidemiological situation. Gasoline station receipts, for their part, could have been boosted by higher pump prices. We expect headline sales to have expanded 0.3% MoM. Spending on items other than vehicles might have fared better, rising 0.6% MoM.”

SocGen

“We look for strong monthly gains on retail sales (1.1% MoM) and industrial production, both on the back of the auto sector. New motor vehicle sales for October were reported up to 12.9 M units from 12.2M  units in September. While a solid percentage increase, this is still a low pace of sales growth. Gasoline sales are also expected to be up substantially due to price increases more than to sales volumes. For non-autos, we expect retail sales to edge up just 0.3% MoM. Components are likely mixed. We are incorporating new credit card spending evidence into our retail sales predictions. So far, success has been mixed. Either we are not capturing the newly available data correctly or the correlations are just too unstable to be of use in the monthly readings.”

CIBC

“Retail sales likely surged by 1.7% in the US in October as price gains amplified sales of vehicles and gasoline among other categories. Unit sales of autos jumped, and spending at restaurants looks to have picked up, in line with the improvement in OpenTable data on reservations. Even when excluding those categories along with building materials, the control group likely posted a solid 0.9% advance. However, that will largely reflect price increases, as spending on ex. auto goods could have fallen in volume terms at the expense of progress in service sectors, reflected in high-frequency indicators. Our forecast implies spending in the control group would be 23% above pre-pandemic levels, leaving ample room for a pullback ahead when services are able to reopen more fully. We are slightly more optimistic on the control group than the consensus, but likely not be enough to cause a sustained market reaction.”

Citibank

“US Retail Sales – Citi: 2.2%, median: 1.1%, prior: 0.7%; Retail Sales ex Auto – Citi: 1.1%, median: 0.9%, prior: 0.8%; Retail Sales ex Auto, Gas – Citi: 0.7%, median: 0.5%, prior: 0.7%; Retail Sales Control Group – Citi: 0.7%, median: 1.1%, prior: 0.8% - following two months of upside surprises to retail sales, we again expect another strong print in October with upside risks to sales in the retail control group, partly due to rising prices for goods broadly.”

TDS

“Retail Sales likely rose strongly in October – we estimate 1.1% MoM — but note that the data are nominal and goods prices rose 1.5% in the October CPI. (The report mainly covers goods and related inflation-adjusted data are reported with a lag.) Along with higher prices, real goods spending is likely also being restrained by a fading of fiscal stimulus and an ongoing shift back toward services spending.”

See – US Retail Sales Preview: Win-win for the dollar? Three scenarios, only one dollar-negative