US: Retail sales to increase by 0.7% in September - Nomura

Analysts at Nomura expect the US retail sales to increase by a solid 0.7% m-o-m in September, likely driven by a strong rebound in sales at auto and auto parts dealerships.

Key Quotes

“The light vehicle sales in September were strong after a slowdown in August. However, the expected increase in sales of autos and parts will likely be transitory. Excluding autos and auto parts, we forecast a 0.4% m-o-m increase in retail sales.”

“For core (“control”) retail sales, we expect a healthy 0.5% m-o-m gain for September, following a modest 0.1% advance in August. The weak reading for August came on the heels of a sharp increase in July. Strong incoming labor market data and elevated consumer sentiment suggest momentum in personal consumption growth remains intact. Thus, we continue to expect robust PCE growth to lead GDP growth in the near term.”

“Elsewhere, gasoline prices appear to have trended lower in September after seasonal adjustment. Receipts at gasoline stations will likely slow in September and lower total retail sales slightly.”