us retail sales preview april 2019
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First Look At Private Consumption Growth In Q2


Retail sales for April

- Advance expected at 0.2% m/m, prior 1.6%

- Ex-autos seen at 0.7% m/m, prior 1.2%

- Ex-autos and gas expected at 0.3% m/m, prior 0.9%


LONDON, 15 May (LS NEWS) – Following the biggest jump in a year and a half in March, US retail sales growth is expected to have slowed in April on a decline in car sales, analysts said. The latest data is scheduled for release at 13.30(BST)


Highlighting the volatile nature the monthly report, analysts said they expect the April headline rate to fall to 0.2pct from March’s 1.6pct (M/M), the highest consumer price growth in 18 months. The core rate is seen at 0.7pct versus 0.9pct in March.


A note from Macquarie said, “Auto sales declined in April relative to March, which may weigh on the headline.”


March gains were supported by increased sales of motor vehicles and petrol. Excluding this segment of the data, core sales still grew 0.9pct with gains coming from apparel stores, miscellaneous store retailers, furniture stores, non-store retailers and grocery stores. The only major segment in March to post a decline was hobby stores and sporting goods, according to data from the US Department of Commerce. 


Warning signals are flashing globally for the car sector, with auto sales in Chinaon a 10-month downturn. Analysts at Scotiabank said the sector has the potential to undercut US retail sales growth as a whole. “The volume of vehicle sales fell -6.3pct m/m in April. Vehicle prices were soft as new vehicle prices were up by only 0.1pct m/m but used vehicle prices fell by 1.3pct. Vehicles carry a 20pct weight and so this will be a significant drag on total retail sales.”


With the market expectations of a 73pct for a Fed rate cut this year, observers will be closely watching US consumer demand for any signs of weakness. Analysts at ING said the market is wrong to predict a coming rate cut with a Q2 comeback in consumer spending likely. “Consumer spending growth slowed during the first quarter, but with the jobs market in good health and wage growth continuing to pick-up, the fundamental backdrop points to a decent rebound during the second quarter.”


The labour market in the US continues to remain strong with the wage and inflation picture helping to support the purchasing power of consumers. However, without a breakthrough, the trade dispute between the US and China could start to weigh on the businesses in both countries. Early Wednesday, China reported April retail sales growth of 7.2pct y/y, the weakest pace since 2003, led by a slowdown in consumer goods and cosmetic sales.


Luke Mumford


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