Free Trial

MNI 5 THINGS: US September Sales Seen +0.6%, Ex-Auto +0.4%

     WASHINGTON (MNI) - The US Retail Sales Report for September will be
released Monday, and analysts are expecting overall sales to rise by 0.6% and
ex-auto sales to rise by 0.4%, based on an MNI survey of analysts.
     Ahead of the release, we outline five themes for particular attention.
--DOWNSIDE RISK OF OVERALL SALES
     Analysts are expecting headline retail to rise by 0.6% in September.
However, given their history of overestimating this value, there is a downside
risk to this forecast. Over the last 20 years, analysts have overestimated the
headline number 11 times by an average of 0.38pp and underestimated it seven
times by an average of 0.37pp. This indicates that a potential miss in either
direction this month is likely to be by relatively the same amount. Recently,
this trend has slightly changed in that analysts have overestimated and
underestimated four times each in the last ten years. Additionally, their
average misses have changed to 0.30pp for overestimates and 0.33pp for
underestimates. Still there is a possibility for a downside surprise to the
headline value in this report.
--NO CLEAR RISK FOR EX-AUTO SALES
     In the month of September, analysts have not shown a clear tendency to miss
in either direction for ex-auto sales. In the last 20 years, they underestimated
ten times, missing by an average of 0.24p, and overestimated eight times by an
average of 0.40pp. In the most recent ten years, they have a fairly even split
as well. They have overestimated four times and underestimated five times.
However, the magnitude of their misses in this time has been smaller, with
overestimates averaging 0.28pp and underestimates averaging 0.20pp. This
suggests that while the direction of a potential miss is not clear, if analysts
do miss, an overestimate is likely to be larger than an underestimate.
--MARKETS SEE SOFTER RISE
     This month, markets are expecting retail sales to rise by 0.4% while
analysts are expecting a stronger gain of 0.6%. A look at their respective
histories over the last year shows that markets have missed to the high side
seven times and analysts have done so four times. Markets have missed to the low
side four times and analysts have done so five times. This shows no clear
tendency for analysts to miss in either direction, but does reveal that markets
tend to overestimate. The magnitude of their misses is quite different, with
markets overestimating by an average of 0.53pp and analysts by 0.40pp and
markets underestimating by an average of 0.68pp and analysts by 0.36pp. Given
their history, it would seem as though markets are likely to overestimate.
However, since they are expecting a more modest gain than analysts this month,
it is likely that there may be a slight downside surprise to analysts' forecast.
--CPI GAS PRICE DOWNSIDE RISK
     Ahead of the release on Monday, the Bureau of Labor Statistics released the
September Consumer Price Index report, which indicated that the price of
gasoline fell by 0.2%. The CPI for gasoline is a strong correlate of gas station
retail sales, which suggests that gas station sales may come in soft in the
September report. It should be noted that if retail gas sales were to match the
decrease of the September CPI, it would only be a minor departure from a string
of strong gains going back to May of this year, and most recently being
continued by a gain in August of 1.7%. Further, since the CPI for gasoline is a
more volatile indicator than retail gas station sales, gas station sales are
likely to experience a less severe drop if they do fall.
--VEHICLE SALES POSITIVE FACTOR
     According to data from major auto manufacturers compiled by MNI, unit sales
of cars manufactured in North America saw strong performance in September with a
m/m unadjusted increase of 6.1% from August, a welcome change from August and
July, which both saw consecutive m/m and y/y declines. However, since the data
did not include cars manufactured by General Motors or imported vehicles, there
is still a possibility that autos may be softer than the industry data suggest.
Also important are the Consumer Price Index for both new cars and used vehicles,
which were down 0.1% for new cars and down 3.0% for used vehicles in September,
signaling that lower prices could mute gains in unit auto sales, and exacerbate
losses.
--MNI Washington Bureau; +1 202-371-2121; email: shikha.dave@marketnews.com
--MNI Washington Bureau; +1 (973) 494-2611; email: harrison.clarke@marketnews.com
[TOPICS: MAUPR$,M$U$$$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.