US Retail Sales Preview: Forecasts from six major banks, slowing in core spending

The US Census Bureau will release the June Retail Sales report on Friday, July 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. 

Retail Sales are forecast to rebound to 0.8% in June with the ex-autos to 0.6% and control rising to 0.3%. 

Commerzbank

“We expect June retail sales to rise by 1.0%, but higher prices, especially at gas stations, are largely responsible for this.”

TDS

“We look for retail sales to recover in June (0.5%), following the series' first contraction this year in May. Spending was likely aided by another firm showing in gasoline station sales and a rebound in the auto segment. We also look for another gain in the eating/drinking segment as consumers continue to transition away from goods. That said, control group sales likely fell again (-0.5%).”

SocGen

“We expect an increase in real consumption of 1.0-1.5%, which is a further slowing of consumption back to a longer-term trend. Largely this is as expected. In June, new motor vehicle sales recovered to 13 m.u. pace from 12.68 in May. Gasoline prices soared in June, which lifts the retail sales excluding autos measure. The control group strips out vehicles and gasoline sales, and we expect a more moderate 0.4% increase.”

NBF

“Car dealers likely contributed positively to the headline number, as auto sales increased during the month. Gasoline station receipts, for their part, may have expanded steeply judging from a sharp increase in pump prices. All told, headline sales could have advanced 0.9% MoM. Spending on items other than vehicles may have been a tad weaker, rising 0.8%.”

CIBC

“With higher gas prices and auto unit sales in June, retail sales likely more than made up for the weakness seen in May and rose by 0.9%. However, things likely won’t look as rosy elsewhere, as higher prices for essential goods will likely squeeze discretionary spending volumes, while the slowdown in housing activity could have weighed on furniture and appliance sales. The 0.3% advance expected in the control group (ex. gasoline, autos, restaurants, and building materials) will therefore reflect price increases, and implies a contraction in real spending.”

Wells Fargo

“We forecast retail sales rose 0.8% last month. But price gains were again likely a key factor boosting these nominal sales estimates, as we expect goods prices continued to rise. While inflation continues to cloud this nominal read on sales, the retail data remain an important indication of how goods spending is evolving. Auto sales should provide a decent boost to overall sales in June based on previously reported vehicle sales data. Supply chains have shown notable signs of improvement, but until there is a further thawing in supply, we view it as unlikely for a sustained recovery in the hard-hit sector. More broadly, we forecast goods spending to decline on-trend as households continue to dedicate more wallet share to services this summer. The dwindling demand for goods has sparked concern of the potential for retail inventories being overbuilt. It is true that inventories are starting to be rebuilt, but there is little indication of a large enough overstocking to cause discounting and consequently sharp goods disinflation anytime soon.”