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     WASHINGTON (MNI) - The Advance Monthly Sales For Retail And Food Services
for June will be released Monday and the outlook is for a 0.6% gain for overall
retail sales and a 0.3% rise ex-auto, based on an MNI survey of analysts.
     Ahead of the release, we outline five themes for particular attention.
     - Analysts tend to overestimate headline retail sales more often than they
underestimate it. In the last 20 years, analysts have overestimated headline
retail 13 times. When they do overestimate, they miss by an average of 0.42pp
compared to 0.33pp for their underestimates. Over the last ten years, analysts
have overestimated by an average of 0.41 seven times, suggesting that the 0.6%
rise of 0.6% has potential for a downside risk.
     - Analysts have a very significant tendency to overestimate retail sales
excluding autos in the month of June. In the last 20 years, analysts have
overestimated 16 times but only underestimated twice. When analysts do
overestimate, it tends to be a larger miss than when they underestimate, with
the average overestimate at 0.31pp compared to their average underestimate of
0.2pp. More interesting, they have overestimated ex-auto sales nine times in the
last 10 years. While the median expectation among analysts is on the low side at
a 0.3% rise in the month, if following the June trend, this could suggest a
downside surprise.
     - Markets and analysts are slightly at odds on what to expect for June
retail sales, with markets forecasting a 0.8% rise compared to analysts'
expectations for a gain of 0.6%. Markets tend to slightly miss more often than
analysts do and also have a higher tendency to overestimate when they do miss,
overestimating eight times while underestimating only five times in the last
year. Analysts, while they do overestimate less than markets do, overestimate
more than they underestimate. However, when they overestimate, it is only a
0.36pp miss while markets, when they overestimate, their average is 0.54pp,
including a large overestimate in hurricane-impacted October 2017 that followed
a large underestimate in the previous month. This indicates that there is a
slightly higher chance of retail sales being softer than analysts expectations
for 0.6%, but an even larger probability that it will be softer than the market
expectation of 0.8%.
     - Given a 0.5% increase in gasoline prices in June's CPI report, gasoline
may have been an upside factor for retail sales, though at a slower pace after
solid gains in the previous two months. In addition, industry vehicle sales
point to a further increase in vehicle sales in this month's report. Outside of
those categories, though, there should be some backtrack of the widespread sales
gains seen in the May report.
     - Even as sales growth is expected to slow in June, it will finish off a
solid second quarter that bodes well for PCE when it is released in two weeks.
Retail sales were up 5.3% at an annual rate in the first two months of the
quarter compared with the first quarter, while sales ex. motor vehicles were up
5.2% and sales excluding foods services, motor vehicles, gas, and building
materials were also up 5.2%.
--MNI Washington Bureau; +1 212-800-8517; email:

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