Retail sales figures for the US in May are due out later today and are seen as a key check on the health of the American shopper.
The data, from the US Census Bureau, covers retail and food services and is expressed in cash terms, rather than in volumes.
In April, sales were 0.3% higher than in the previous month, and 4.7% higher than in April 2017.
Winners and losers
According to Bloomberg, the consensus among analysts is for a 0.4% rise in May compared with April, although estimates range from 0.1% to 0.6%. Bloomberg added: “Despite a wide consensus range, strength for retail sales is the call.”
The April figures showed a stronger number, 0.4%, once motor vehicle related spending was taken out, suggesting some weakness in auto sales. Analysts expect a repeat this time, with a consensus estimate of 0.5% month-on-month growth excluding sales of motor vehicles and parts.
Furniture and home furnishing stores saw sales rise by 0.8%, while there were 0.4% increases for, respectively, building material and gardening equipment retailers, and food and beverage stores.
The category “non-store retailers” experienced a 0.6% rise, while petrol stations saw sales rise by 0.8%.
In the category “general merchandise stores”, sales rose 0.3%.
Stores selling electronics and appliances saw a 0.1% decline compared with March, while “food services and drinking places” experienced a 0.3% drop.
Good news for shares
America’s booming economy, with gross domestic product forecast to rise by 2.8% this year and an unemployment rate below 4% of the workforce, would be expected to support a buoyant retail scene. That is good news for investors, given that consumer spending is the bedrock of the economy, accounting for two-thirds of economic activity.
Where there are areas of weakness, as seen in some sectors in the April figures, analysts will try to sift “cyclical” from “structural” problems. The former are related to the economic cycle and can be expected to correct themselves as the cycle turns. The latter arise from changing tastes and are less susceptible to being corrected by changes in economic activity.