US retail sales expected to begin the summer on a high note

US consumers probably opened their wallets with gusto in July. The retail and food services sales jumped by 1.0% last month, erasing the surprisingly weak -0.3% print posted in May. 

The projected pickup in activity is expected to be broadly based during the reference period. If the assumption that unit motor vehicle purchases rebounded to a seasonally adjusted annual rate of 17.5 million is on the mark, auto-dealer revenues likely climbed by about $950 million, adding two ticks to headline sales in July. 

"The portion of the Census Bureau's advance report that is used by government statisticians to produce nominal consumer goods spending estimates, is expected to climb by 0.8%, erasing the 0.1% prior-month", says Societe Generale. 

Net of the projected strength in motor vehicle demand, retail sales probably expanded by 0.9%, the largest one-month gain since March. Further adjusting for forecasted increases in building materials purchases and gasoline service-station receipts, retail control.

"Spending metric in July is 3.8% annualized above its April-June average, following a 4.1% spring-quarter gain", added Societe Generale.