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13 Mar 2015
US retail sales: Weak but many factors at play - Westpac
FXStreet (Bali) - The Westpac Global Strategy Group breaks down the main details from the disappointing US retail sales report, noting that while weak, there are many factors at play.
Key Quotes
"US retail sales fell 0.6% in February. Sales were weak across the board with declines in all storetypes except gasoline up 1.5% as prices rose; food, up 0.3% after a 0.2% Jan fall; and sporting goods, up 2.3% which reversed less than half the decline over the previous three months in this storetype. Clothing sales were flat after falls in November to January. Non-store retailing rose a solid 2.2% after turn of the year softness. Sectors to fall in both Jan and Feb included health & personal care, furniture, eating out and department stores; autos, electronics, general merchandise, miscellaneous and DIY all fell by 1-3% after Jan gains of 1.0% or lower, in other words the Feb drop more than reversed the gains in January."
"This is a weak report, but there are many factors at play. Consumers are clearly spending cash on non-retail services like home heating, which will be captured in the broader personal spending data later this month. Lower prices for imported clothing and other goods thanks to the stronger US dollar would also weigh on these nominal sales values even if volumes were higher. But it may also be true that households have been inclined to save more given the recent build-up in wealth over 3 years to Q2 2014 stalled in Q3 last year, although data out today showed household wealth accumulating again in Q4."
Key Quotes
"US retail sales fell 0.6% in February. Sales were weak across the board with declines in all storetypes except gasoline up 1.5% as prices rose; food, up 0.3% after a 0.2% Jan fall; and sporting goods, up 2.3% which reversed less than half the decline over the previous three months in this storetype. Clothing sales were flat after falls in November to January. Non-store retailing rose a solid 2.2% after turn of the year softness. Sectors to fall in both Jan and Feb included health & personal care, furniture, eating out and department stores; autos, electronics, general merchandise, miscellaneous and DIY all fell by 1-3% after Jan gains of 1.0% or lower, in other words the Feb drop more than reversed the gains in January."
"This is a weak report, but there are many factors at play. Consumers are clearly spending cash on non-retail services like home heating, which will be captured in the broader personal spending data later this month. Lower prices for imported clothing and other goods thanks to the stronger US dollar would also weigh on these nominal sales values even if volumes were higher. But it may also be true that households have been inclined to save more given the recent build-up in wealth over 3 years to Q2 2014 stalled in Q3 last year, although data out today showed household wealth accumulating again in Q4."