U.S. retail sales likely to have risen modestly in May, personal consumption to rise in Q2 – Wells Fargo

U.S. retail sales are expected to have grown in May. In April, retail sales had grown a less-than-expected 0.4 percent in April, while March’s initial estimated decline was revised up to a gain of 0.1 percent. The headline rise was underpinned by rebounds in auto sales and sales at building material and garden equipment stores that were up 0.7 percent and 1.2 percent, respectively.

Nonstore retailers, which continue to advance from the structural shift towards online purchases, also recorded a solid gain. Control group retail sales were up a more modest 0.2 percent in April, although the February and March prints were upwardly revised.

Even if April’s rise in retail sales was below expectations, the details indicate towards a possible rise of consumption in the second quarter.

“We expect retail sales to rise a modest 0.2 percent in May and look for personal consumption to increase at a 3.3 percent annualized rate in Q2”, noted Wells Fargo in a research report.