US Retail Sales Preview: looking for hints of a strong rebound for consumer spending in Q2 - Wells Fargo

On Friday, retail sales data will be release in the US. According to analysts from Wells Fargo, retail sales likely rose 0.1% in June. The projection is below market consensus (0.2%) and it could represent a modest recovery from the 0.3% slide of May. 

Key Quotes: 

“After a disappointing showing in the first quarter of the year, we are looking to retail sales for hints of a strong rebound for consumer spending in Q2. The strength of said resurgence was challenged by the May retail sales report, which showed a decline of 0.3 percent on the month.”

“Lower gasoline prices were a contributor to the soft read, though not the only culprit. Auto sales continued to weigh on retailers, and paltry performances in other sectors were unable to compensate. Sales were down at electronics and sporting goods stores, department stores and eating & drinking places. These categories tend to reflect consumers’ discretionary spending, so continued weakness here may be a red flag that consumers are pulling back.”

“Control group sales, which go into GDP calculations, were flat in May but up strongly in April. We will look closely at this category in June to gauge the strength of the Q2 rebound in personal spending.”