US October retail sales expected to echo strength of jobs report

The Census Bureau's Advance Report on Retail and Food Services Sales in October will provide an important early glimpse at consumer goods spending in the fall quarter. Increased outlays across a wide variety of businesses probably pushed retail and food services sales 0.5% higher during the reference period - the largest increase in three months.

The headline gain is expected to be eclipsed marginally by strength in specific spending categories that are used by the Bureau of Economic Analysis to estimate nominal goods purchases in the National Income and Product Accounts. Indeed, retail control outlays probably jumped by 0.6% in October, erasing September's surprising 0.1% dip.

"Our retail control forecast suggests that nominal personal consumption expenditures (PCE) jumped by 0.5% - the largest gain since May. Although retail goods and services costs likely climbed for the first time in three months, real PCE is still expected to have reaccelerated, rising by 0.3% and placing inflation-adjusted spending a very healthy 2.2% annualized above the July-September average. If that projection is on the mark, an easily achievable pair of 0.2% upticks in November and December is all that will be required to hit our current 3.0% Q4 real PCE target", commented Societe Generale.