Ahead of this Friday’s retail sales report, which bulls are hoping will show a continuation of the strong spending trends revealed in last month’s data, Bank of America is once again the bearer of bad news.
As BofA reports in a note released this morning, according to the bank’s internal aggregated credit and debit card data, consumer spending slowed in July, with retail sales ex-autos down 0.3% mom on a seasonally adjusted basis. This follows the flat pace in June for retail sales ex-autos. As chief economist Michelle Meyer points out, “we think the recent weakening in consumer spending is largely a cooling down after the exceptionally strong gains from March through May (Chart 1).
Looking at the full year, BofA finds that retail sales ex-autos are only up 0.7% yoy, and points out that Census Bureau data have closely followed the trend in the BAC data, suggesting that the market should prepare for either a downward revision to the June data and/or disappointing July figures: “In our view, this sets up for a softer Census Bureau retail sales report on Friday – we would not be surprised to see either disappointing July sales and/or a downward revision to June.”
This post was published at Zero Hedge on Aug 10, 2016.
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