US Retail Sales Forecast: Correction following January surge – Previews by eight banks

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

Retail Sales in the US are expected at -0.3% year-on-year vs. 3.0% in January. Meanwhile, ex-autos is expected at 0.2% YoY vs. 2.3% in January. The so-called control group used for GDP calculations is expected at -1.2% vs. 1.7% in January.  

Commerzbank

“For February, we expect a partial correction (forecast -0.3%), indicated, for example, by the figures already published on auto sales.”

Credit Suisse

“We expect retail sales to fall 0.9% MoM in February, partly reversing a strong increase in January. Noisy seasonal adjustments and unseasonably warm weather likely played a role in last month’s report, so a normalization lower is likely.”

Deutsche Bank

“February's data should see some reversal. A dip in unit motor vehicle sales will push headline sales (-1.2% vs. +3.0%) lower, while the expected payback from food services and drinking places, as well as nonstore retailers, should weigh on sales excluding automobiles (-1.1% vs. +2.3%) and retail control (-0.3% vs. +1.7%).”

RBC Economics

“We expect US retail sales edged 0.1% lower in February, with sales in the motor vehicle sector shrinking by 3.3% during that month.”

NBF

“Car dealers likely contributed negatively to the headline number, as auto sales fell during the month. Gasoline station receipts, meanwhile, could have stayed more or less unchanged judging by the stagnation in pump prices. All told, headline sales could have contracted 0.7%, erasing only a fraction of January’s gain. Spending on items other than vehicles could have fared a little better, retreating just 0.5%.” 

TDS

“We expect retail sales to give back some of the strength from Jan's 3% MoM surge, with the headline coming in flat. Declining auto sales will be a key culprit, while sales in gas stations are expected to offer support. Importantly, control group sales likely fell by 0.2% after registering a booming 1.7% expansion in Jan. We also look for sales in bars/restaurants to have slowed in Feb.”

CIBC

“January’s surge in auto sales looks to have reversed in February, but an increase in restaurant reservations and higher gasoline prices could have offset that to result in flat retail sales in February. The control group of sales (ex. autos, restaurants, gasoline, and building materials), which feeds more directly into non-auto goods consumption in GDP, likely saw sales fall by 0.5% following a lofty increase in January that seemed to be biased up by seasonal factors. Moreover, services could have garnered more funds than control group categories in February, given the higher pace of inflation in those sectors.”

CitiBank

“We expect a 0.7% MoM decline in total retail sales in February, after a very strong 3.0% MoM increase in January. Part of the strength in January was due to seasonal factors not capturing shifts in consumption patterns around end/beginning of year well. While this should not be as relevant in the February data, only a 0.7% decline this month does not offset the majority of the strength from last month and suggests that underlying strength in goods consumption while not as strong as January is somewhat stronger than what we would have thought six months ago. However, we would still expect goods consumption in the coming months to be somewhat weaker as the rotation to services consumption continues.”