U.S. headline retail sales likely to have grown modestly in January

The headline retail sales in the U.S. might have grown modestly in January. According to a Societe Generale research report, the headline retail sales might have grown 0.2 percent. Auto sales are expected to have dropped 1 percent. On the contrary, retail gasoline prices are anticipated to have grown by about 3.8 percent that might have boosted sales at gasoline stations by around 1.5 percent. Stripping autos and gasoline, retail sales might have grown 0.3 percent, stated Societe Generale.

In the meantime, the retail sales control group rose slightly by 0.2 percent in December and are expected to have recorded similar increases in January. The weakness in December was centered in the general merchandise and grocery store categories. Grocery stores sales dropped 0.3 percent in December, whereas the general merchandise sector had witnessed a drop of 0.5 percent in sales. The latter category was pretty weak throughout most of 2016. Therefore, the December result is no surprising. It is likely to have dropped by additional 0.3 percent in January.

On the contrary, grocery stores sales typically recover markedly after a subdued month, so after recording a flat result in November, the decline in December was a surprise. But the grocery stores sales are expected to have recovered by about 0.3 percent in January. Meanwhile, the non-store retailers component might have grown further by 1 percent in the month.

“In any case, if our forecast is correct, the yoy growth in the control group would actually tick up from 3.3 percent to 3.6 percent in January, although it would get Q1 spending off to a subdued start”, added Societe Generale.