US Retail Sales Fail to Pick Up Momentum in March - ING
Rob Carnell, Chief International Economist at ING, notes that the US
retail sales fall 0.3% mom in March, while the "core" rises only 0.1%
mom.
Key Quotes
“Even when you take some
upward revisions into account for February, this is yet another soft
retail sales release, and makes an April rate hike look far-fetched
Consensus
was hoping that despite the likelihood that the headline retail sales
figure would be depressed by very weak auto sales in March, rising
gasoline prices would provide some offset at the headline level, and a
pick up in underlying sales would prop up the core figures. This did not
happen. Indeed, the headline fell by 0.3% mom, much worse than the 0.1%
increase expected, and core figures were also weak, with the control
group for sales which strips out most of the volatile components, rising
only 0.1%mom.
Moreover, when you take into account that these
figures are dollar amounts, and not adjusted for inflation, which most
likely rose in March as a result of higher energy prices (data released
tomorrow), then it looks as if real consumer spending will barely
register 1.0% growth in 1Q16, and real GDP for the same period will be
equally soft.
All of which makes it seem highly unlikely that
the April FOMC meeting will deliver a further rate hike on top of the
December 15 hike. Indeed, some expectations that the April meeting might
be used to flag a possible June hike also look stretched following this
and other recent soft activity data. We expect some softening in the
rhetoric of Federal Reserve speakers in advance of this month's meeting,
so a "no change" will not be a surprise for markets.”
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