US retail sales in December were weaker than expected - Natixis

Thomas Julien, Research Analyst at Natixis, notes that the US retail sales accelerated as expected in December, gaining 0.6% MoM, slightly below expectations.

Key Quotes

“The increase was largely driven by car and gasoline sales (as oil prices increased). Yet, the control group of retail sales (the portion the BEA is using to estimate GDP) surprised on the downside, increasing by a modest 0.2% MoM. All in all, consumption may slowdown slightly in Q4 2016 but the trend is still robust while job gains and accelerating wages should support spending in the near term.”  

“Retail sales rose by 0.6% MoM in December, slightly below consensus expectation and ours (+0.7% MoM). The acceleration in retail sales was mostly driven by car and gasoline sales. This was largely awaited as auto data were strong while oil prices increased during the period (retail sales data are reported in value). Yet, the control group sales surprised on the downside, gaining a modest 0.2% after 0.1% in November. This group is used by the BEA to estimate GDP and is more indicative of the trend of consumption.”    

“In short, report is slightly weaker than expected with a softening of consumption in Q4. As result, household expenditures will slowdown in the last quarter of 2016 but one should keep in mind that the trend is still fairly robust. In addition, looking forward, with still solid employment gains and rising wages we expect consumption to remain dynamic in the near term.”