Preview: Retail Sales, PPI, Empire Manufacturing - Barclays

Retail sales: We forecast retail sales to have declined 0.3% m/m in February, with a modest 0.2% rise in core sales offset by a steep decrease in gasoline station sales and fewer motor vehicle sales on the month. Retail gasoline prices fell sharply in February, leading us to look for lower nominal fuel sales. Manufacturers’ reports of car and light truck sales were slightly weaker on the month as well. A 0.2% m/m in the retail control group, as well as better sales results at restaurants and building supply stores should provide only a partial offset, leaving total sales lower by 0.3%.

PPI: We look for the final demand measaure of producer prices to be down 0.3% m/m in February, with an unchanged reading on core PPI dragged lower by energy and food prices. Trade services margins rose 0.9% m/m last month; a reversal of this price spike should depress an otherwise solid reading of 0.2% m/m for final demand PPI ex food, energy and trade services. We forecast headline and core PPI at -0.1% y/y and 1.1% y/y, respectively.

Empire State mfg: New York state manufacturing conditions have deteriorated rapidly in recent months. The Empire State index barely improved in February from its steep decline at the beginning of the year. While the manufacturing sector has been depressed by weak growth abroad and poor export demand, better-than-expected readings from other indicators as of late suggest that the decline in the Empire state index may overstate the degree of weakness in activity. We look for a modest improvement to -12.0 in March. 

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