12 Feb 2016
US: Consumer demand to have a very strong start of the year - Wells Fargo
According to analysts from Wells Fargo, today’s report on retail sales was better-than-expected not only because of the headline number but also of past revisions signaling sales ended last year relatively strong.
Key Quotes:
“Retail sales surprised markets in January by posting a better-than-expected 0.2 percent increase. But what makes this month’s report more impressive is that the December number was revised up from a decline of 0.1 percent to 0.2 percent. Thus, instead of being weak at the end of last year, retail sales actually ended the year relatively strong.”
“Perhaps the best news for the U.S. economy was the result for control group retail sales, which were up a very strong 0.6 percent. Recall that these are the components of retail sales that go into the calculation of GDP. This increase in control group sales was the strongest since a print of 0.8 percent in May of last year and should set the stage for perhaps, an improvement in consumer demand during the first quarter of the year if these numbers remain positive in the coming quarters.”
“Furthermore, since these results are given in nominal terms the expectation is that real retail sales were even stronger because we had further declines in gasoline prices during the month of January. Thus, in real terms we should expect U.S. consumer demand to have been very strong to start the year.”
Key Quotes:
“Retail sales surprised markets in January by posting a better-than-expected 0.2 percent increase. But what makes this month’s report more impressive is that the December number was revised up from a decline of 0.1 percent to 0.2 percent. Thus, instead of being weak at the end of last year, retail sales actually ended the year relatively strong.”
“Perhaps the best news for the U.S. economy was the result for control group retail sales, which were up a very strong 0.6 percent. Recall that these are the components of retail sales that go into the calculation of GDP. This increase in control group sales was the strongest since a print of 0.8 percent in May of last year and should set the stage for perhaps, an improvement in consumer demand during the first quarter of the year if these numbers remain positive in the coming quarters.”
“Furthermore, since these results are given in nominal terms the expectation is that real retail sales were even stronger because we had further declines in gasoline prices during the month of January. Thus, in real terms we should expect U.S. consumer demand to have been very strong to start the year.”