US retail sales to increase at restrained pace – Wells Fargo

Analysts at Wells Fargo, expects the US retail sales to increase in May, but at a more restrained pace of 0.3% when compared to April’s surge of 1.3 percent.

Key Quotes

“Higher gas prices were certainly a factor in April’s rise, however, the data are not adjusted for price changes. In addition, we noted other areas of strength in the numbers, such as autos & parts dealers, clothing stores and particularly non-store retail sales which include online shopping. We will be looking for continued strength in these categories as the data are volatile and prone to significant revision.

We will be paying close attention to control group sales, which excludes autos, food, gasoline and building materials, as it goes directly into the calculation of GDP. “Core” retail sales started the second quarter off on a good note, posting a strong 0.9 percent increase in April. A solid print in May will add credence to our call for PCE to increase at a 3.9 percent annual rate in the second quarter.”