The Forecast File: US Retail Sales For February

Today’s update of February retail sales, scheduled for release at 8:30 a.m. eastern, will bring some fresh numbers for thinking about the recent deceleration in personal consumption expenditures. Here’s a brief look at some of the commentary and predictions:
Retail Sales in U.S. Probably Rose in February by the Most in Five Months
Bloomberg | Mar 13
Retail sales in the U.S. probably rose in February by the most in five months, spurred by the strongest demand for automobiles since 2008, economists said before a report today. The 1.1 percent rise would follow a 0.4 percent gain in January, according to the median forecast of 81 economists surveyed by Bloomberg News. Excluding autos, purchases may have climbed 0.7 percent.

US Retail Sales Expected to Show an Active US Consumer
Action Forex | Mar 13
Expectation for February US retail sales is for a strong pickup in activity as the labor market has improved putting more money in the hands of households and consumers. The expectation of a 1.1% reading would be the highest since October 2011 and should help to dent the downward slope of the annual pace of retail sales (seen in red above). While part of the gains expected come from robust motor vehicles sales during the month, as well as a pickup in gas purchases due to higher prices, the expectation for core retail sales is for a 0.8% increase – also quite a strong figure.
US Retail Sales Ahead of FOMC Decision Should Not Be Overlooked
Daily FX | Mar 13
Although the key event risk for the day comes in the form of the FOMC rate decision, the big market mover might in fact come a little earlier when US retail sales are released. At the end of the day, the Fed is not expected to do anything at all at today’s meeting and it would probably be in their best interest to leave its outlook as is. Right now the Fed is in a position where it needs to start to consider the possibility of signaling an earlier reversal of monetary policy than had been anticipated given the better than expected improvement in the US economy. However, it is still probably too early to make any material changes and a wait and see approach is most likely the best course of action for the time being. At the same time, this does make today’s retail sales data all the more interesting, with any signs of strength out of the numbers to do a good job of reaffirming the likelihood for a near-term shift in the outlook of the Fed and a transition to a less dovish policy.
Will Rising Gas Prices Spoil Retail Sales Results?
CNBC | Mar 12
Rising gasoline prices could drag down retail stocks ahead of monthly sales figures, especially as fuel costs average $3.80 per gallon, up 50 cents year to date and up 30 cents over the past month. “I think it’s a potential headwind, for sure,” Karen Finerman of Metropolitan Capital Advisors said Monday on “Fast Money.”
Wells Fargo Retail Sales Forecast For Feb: A “Modest” +0.7% Rise
Wells Fargo Economics Group | Mar 9
Retail sales expanded at a slower-than-expected pace of 0.4 percent in January as motor vehicle sales fell 1.1 percent and electronic store sales failed to rebound. The modest growth in retail spending was a bit surprising given the strong pace of auto sales, which rose 5.9 percent from January to February. Core retail sales, which exclude automobiles and gasoline rose 0.7 percent. Expectations are also high for February with auto sales again surging higher for the month. Given the disconnect between last month’s auto sales and retail sales, our forecast calls for a slight improvement in the headline number to 0.9 percent. We expect core retail sales to post a modest 0.7 percent increase. Going forward, consumer spending will remain restrained for most of the year, averaging just 1.5 percent. If price pressures from higher gasoline prices emerge over the next few months, there could be further downside risk to consumer spending in the months ahead.