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U.S.: Growth Is In The Retail

ByBNP Paribas
AuthorPhilippe d'Arvisenet
Published 06/13/2013, 03:29 AM
Updated 03/09/2019, 08:30 AM

Retail sales were up 0.6% in May, beating expectations of a 0.4% rise. Sales were strong in almost all sectors. Only gas stations (-0.2%) and food and beverages (-0.4%) saw their sales declining over the month. The biggest increase came from cars, with a vigorous +1.8%.

Excluding volatile items (cars), price-sensitive sectors (gas) and building materials (which are part of residential investment and not private consumption in US national accounts), retail sales were up a very solid 0.5% in May, after a revised 0.4% in April (from 0.5%).

Improvements in the labour market, higher stocks and house prices as well as very low interest rates bolstered car purchases and, more generally, household spending in May.

As we envisioned following April’s report, the data are new evidence that the soft patch did not spread beyond March.

Along with the decline in weekly initial jobless claims (-12k to 334k), the strong growth in retail sales witnessed in May is thus consistent with a steady GDP growth over the first half of 2013.

Admittedly, the report is the very first set of hard data covering May (and thus Q2), with Friday's industrial production and data for prices next Tuesday.

On top of that, the FOMC is meeting next week on Wednesday. We do not expect any change in the Fed’s policy, but Chairman Bernanke is very likely to use the post-meeting press brief to further explain what would lead the Fed to taper QE3.

BY Thibault MERCIER

To Read the Entire Report Please Click on the pdf File Below.

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