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2022 Growth Seen At 4.1%: Finance Minister

By Holly Stokes
     WASHINGTON (MNI) - The Advance Monthly Sales For Retail And Food Services
will be released Tuesday and the outlook is for a 0.3% rise for overall retail
sales and a 0.5% rise ex-auto, based on an MNI survey of analysts.
     Ahead of the release, we outline five themes for particular attention.
     The history of analysts' misses in April suggests that both the headline
and ex-auto estimates face a small downside risk. In the past 20 years, analysts
have overestimated April retail sales 11 times, and underestimated only six
times. This trend continues in more recent history, with overestimates in three
of the last four years. Analysts have also demonstrated a tendency to
overestimate April ex-auto, however the pattern is less strong in the last 20
years - with nine overestimates to seven underestimates. This pattern appears to
have intensified in more recent history, again showing three overestimates in
the past four years.
     Last month, both markets and analysts faced an upside surprise as retail
sales jumped 0.6%, above both the 0.2% projected by markets and the 0.3% by
analysts. Now analysts and markets both expect another gain, but analysts expect
a more muted 0.3% rise where markets see a stronger 0.5% print. However, both
markets and analysts have shown a tendency to overestimate in the past year,
with high misses in seven of the last twelve months. The downside risk to the
whisper number is made clearer, with three overestimates in the past four
months. Further, markets are typically less accurate than analysts - with
markets having an absolute average miss of 0.6pp compared to analysts' 0.3pp.
     Gasoline station sales dragged an otherwise robust March report, as the
category fell 0.3%. Now, gasoline station sales looks set to lead the rise in
April - as the already released CPI report shows gas station sales jumped in the
month. There is a strong correlation between the gas prices consumers pay,
measured as CPI gasoline, and the gasoline station sales reported in retail
sales. Consequently, a 3.0% jump in CPI gasoline month/month should translate
into a healthy rise in gas sales and the overall retail sales measure.
     Analysts expect autos to drag an otherwise strong report, as suggested by
the stronger 0.5% estimate for retail sales ex-auto. Already released data on
vehicle sales suggest auto retail sales will be soft in April. Auto sales led
March's 0.6% rise, as the category surged 2.0% - so April's soft reading should
be a dramatic pullback. All the same, analysts expect another healthy retail
report, estimating ex-autos to come in the strongest since November. 
     Second quarter retail sales are typically stronger than the first, and
April's retail sales should be a first indicator of Q2 personal consumption
strength. However, atypical April weather gives a small downside risk. This
April was the coldest in 21 years, and the unusually chilly weather could throw
off seasonal adjustments. The CPI report shows apparel prices increasing 0.3%,
which should be a positive for retail clothing. But with delayed spring
temperatures, seasonal clothes shopping could have taken a hit and be softer
than seasonal adjustments expect. Building materials and garden equipment also
could face a downside risk as planting and other yard work was delayed.
--MNI Washington Bureau; +1 202-371-2121; email: