James Knightley, Chief International Economist at ING, explains that the US retail sales were much softer than hoped at the headline level, rising just 0.1% month on month versus the 0.6% consensus figure reported by Bloomberg.
Key Quotes
“At first glance, it appears that Hurricane Florence has distorted the numbers to some extent with sales at restaurants and bars dropping 1.8%MoM – the biggest fall for two years. Gasoline stations sales and building materials were down too, but most other components posted decent gains with auto sales up 0.8%, furniture up 1.1%, clothing up 0.5%, electronics up 0.9% and sporting goods up 0.7%.”
“More significantly though, the “core” retail control group, which excludes volatile components such as food services, auto dealers, building materials and gasoline, rose a very healthy 0.5%MoM, which was actually above expectations.”
“Further distortions are possible in the next release due to Hurricane Michael, but in general, the rebuild/clean-up operation tends to lead to a bounce in retail sales over subsequent months.”
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