With retailers reporting abysmal Q1 earnings data, there is much at stake in today’s retail sales report, perhaps even more than in the CPI report (which either this month, or June at the latest, will post a steep drop due to energy “base effect” as oil prices today are now lower than a year ago). Yet despite the deplorable earnings reports by prominent retail names , Wall Street remains optimistic and expects a strong rebound in April, with consensus looking a +0.6% mom headline print increase and +0.4% mom rise in the core.
Such expectations may prove overly optimistic. The reason is that according to the latest Bank of America’s internal credit and debt card spending report, retail sales ex-autos increased far less than consensus expects, or 0.2% mom seasonally adjusted. This leaves retail sales ex-autos running at a 0.1% mom rate on a three-month moving average. And while there are month to month fluctuations, the BAC data has converged with the Census data on a three-month average, which according to the bank suggest that “there are slight downside risks to the consensus forecast for Friday’s retail sales report. (Note that the BAC data in the chart is as of April while the Census data is as of March).”
This post was published at Zero Hedge on May 12, 2017.
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