US retail sales are poised to rise by an estimated 1.5% mom in March driven by improved weather conditions and by the earlier gains in real disposable income which have yet to be spent, according to Societe Generale research.
Increases are projected in all key components of the retail sales report. Automakers reported a seasonally adjusted 5.5% sequential increase in unit sales which should contribute 0.7% of the projected increase in overall retail activity.
A rebound in retail gasoline prices should also help propel sales higher. Gasoline costs rose by an estimated 8.3% in March, or by 2% after adjusting for normal seasonality. This should contribute 0.3% to the headline retail sales figure. Even after stripping out these two volatile components, retail activity is projected to rise by a solid 0.8%. Sales of building materials, which correlate well with housing activity, should also benefit from better weather conditions, contributing 0.2% of the projected headline gain.
Excluding autos, gasoline sales and building materials, retail control sales - a key component of consumer spending in the GDP accounts - is forecast to have risen by 0.5%, the strongest reading since November.
