Continued solid demand for US new motor vehicles is expected to offset all but a fraction of the estimated falloff in nominal gasoline purchases. In contrast to the consensus call for a pullback, sales of light trucks and passenger cars expanded to a decade-high seasonally adjusted annual rate of 17.7 million lastmonth.
Capped by a price-induced contraction in gasoline service-station receipts, retail and food services sales probably climbed by 0.3% in August, after a reported 0.6% rise in July. Gasoline -pump prices dropped by 5.3% to a four-month low of $2.726 per gallon during the reference period.
"After adjusting for a modest reduction in the volume of fuel purchased and seasonal influences, service-station revenues likely contracted by 2.1% to $37.6 billion, shaving two ticks off headline sales in August", says Societe Generale.
Taking into account prices and seasonal differences between the unit volume and value series, auto-dealer revenues are expected to have risen by 0.7% to a record $93.4 billion in August.
Net of anticipated movements in building materials, gasoline and motor vehicle sales, retail control, the portion of the Census Bureau's report that is used by the Bureau of Economic Analysis to estimate nominal consumer goods spending, probably increased by 0.5%, the largest advance since May.
"Solid gains are expected in clothing, general merchandise and online purchases associated with the beginning of a new school year to power the pickup in control sales last month. This estimate, if realized, would place control purchases over the July-August span 3.8% annualized above their April-June average, after a 4.9% spring-quarter gain", added Societe Generale.
