Strategic Briefing | 6.14.2011 | U.S. Retail Sales (May)

The update for U.S. retail sales for May arrives later this morning, offering a new data point for deciding if the economy’s slowing, and if so, by how much? Retail sales for April rose 0.5% (seasonally adjusted). The consensus forecast for May calls for a drop of 0.7%, according to Here’s what analysts have been writing recently in anticipation of today’s retail sales report:
Four Scenarios For The US Retail Sales Report
ActionForex | June 14
Tuesday’s key report from the US will be the May retail sales figures. With consumer spending making up a majority of the economy, gauging US spending will give us an important read on the health of the recovery. Will May show consumers curtailing spending in May? We already know that consumers bought less cars in May, and therefore the headline retail sales number will be weak. Overall sales are expected to decline 0.3%, after a 0.5% gain in April.

Weak US retail sales would reinforce belief of soft patch, drive USD lower | June 14
Later in the day, all eyes will be on the US retail sales report which could help to confirm a weak US outlook or dispell some fears. Kathy Lien, director of currency research at GFT, explains: “If consumer spending falls more than anticipated, and that needs to be 1 percent or greater, it could drive the U.S. dollar even lower simply because of shock.” Lien adds: “A contraction greater than 1 percent could lead some people to believe that not only is the recovery losing momentum but the U.S. economy could be headed for a contraction.
Sunrise Market Commentary
KBC | June 14
In May, US retail sales are forecasted to have dropped for the first time in almost one year. The consensus is looking for a decline by 0.5% M/M due to slowing rises in gasoline prices and a decline in motor vehicle sales. While the warm weather might have had a positive impact, a fall-back in some categories after the Easter Holidays is likely. Retail sales excluding gas and autos, on the contrary, are forecasted to have risen for the fifth consecutive session, but we believe that the risks might be on the downside of expectations.
Daily FX Strategist
BNP Paribas | June 13
Retail sales data out of the US tomorrow will likely echo the recent data soft patch, but with the Fed discouraging talk of further QE, the dynamic whereby weak US data means more USD liquidity, and by extension a weaker USD, is unlikely to hold. Concerns about global growth discourage investors from seeking higher yielding assets outside of the US, while uncertainty about the effects of ending of QE2 also weigh.
Retail Sales Probably Decreased in May
Bloomberg | June 12
Sales at retailers probably fell in May as Americans bought fewer cars and elevated gasoline costs restrained consumers, reports may show this week. The 0.5 percent drop in purchases, the first decline in 11 months, would follow a 0.5 percent gain in April, according to the median forecast of 62 economists surveyed by Bloomberg News ahead of Commerce Department data June 14. Other reports may show inflation eased and manufacturing expanded.
U.S. Retail Sales – May
TD Economics | June 10
The sharp 10% plunge in new motor vehicle sales in May should push the value of total retail sales lower for the first time since June last year. Weak employment growth and severe storms in the South should also temper household spending activity. During the month we expect sales
to decline by 1.0% M/M, reflecting the softening tone in personal expenditures as the economy navigate through the current soft patch.
Weekly Market & Economic Update
AMP Capital | June 10
In the US, May retail sales should show a 0.3% gain helped by a fall in gasoline prices over the last month. Business surveys for the New York and Philadelphia regions are likely to show that manufacturing growth remains subdued and May housing starts and permits data should show a modest rise after weakness in April.