US May retail sales leave forecasts in the dust
By Alexander Bueso
Date: Tuesday 16 Jun 2020
(Sharecast News) - Investors hoping for a stronger-than-expected reading on monthly retail sales on Tuesday weren't disappointed.
According to the Department of Commerce, in seasonally adjusted terms, US retail sales volumes surged at a 17.7% month-on-month pace in May to reach $485.5bn.
That was comfortably ahead of the 7.4% increase predicted by the consensus and came on top of an upwardly-revised 14.7% drop in April (Preliminary: -16.4%).
Excluding sales of automobiles and parts, retail sales volumes rose by 12.4% on the month and when gasoline is excluded by 18.0%.
Gains were broad-based across the various categories, with sales of motor vehicles 44.1% higher, those of furniture up by 89.7%, electronics rising by 50.5% and clothing surging by 188%.
"These are positive signs but investors need to remember we are not completely out of the woods, and as such cannot get ahead of themselves," said Hinesh Patel, portfolio manager at Quilter Investors.
"Instead it is important to stay diversified in order to ride this period out effectively."
Andrew Hunter at Capital Economics chimed in saying: "We now estimate that real consumption and overall GDP both contracted at a 30% annualised pace in the second quarter, rather than the 40% fall we previously expected.
"[...] Nevertheless, there is still considerable uncertainty over whether spending will continue to recover at this pace over the coming months, particularly given the more recent upturn in new coronavirus cases in a number of states."
For his part, Ian Shepherdson at Pantheon Macroeconomics pointed out how the so-called control measure of retail sales had snapped back to its pre-Covid level.
But he too sounded a note of caution.
"The key point here is that it's now pretty easy to imagine a full reopening of the economy taking all components of retail sales back to their pre-Covid level by, say, July, with the exception of food service, where capacity constraints will hold down sales for the foreseeable future.
"After July, much depends on what Congress does to the enhanced unemployment benefits, currently scheduled to end at the end of the month. If that happens, with millions of people still unemployed, sales will drop back. For now, though, this report is much better than we expected."
Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange
Market.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN