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US DATA: Very Strong Retail Sales Print Should Prompt Upward Growth Revisions

US DATA

The standout from the much-stronger-than-expected September retail sales report is the jump in the control group to 0.7% M/M vs 0.3% expected - that alone will result in upped Q3 GDP growth forecasts. It's the 3rd highest monthly print of the year and a 3-month high (0.3% prior).

  • With five very solid months in a row (averaging 0.5% M/M growth), nominal control group 3M/3M (ie quarterly) annualized control group expansion is now running at 6.4% - that's the fastest for any month since Q1 2023, when real PCE goods consumption printed a 7.4% Q/Q annualized growth rate.
  • Headline retail sales rose by 0.4%, up from 0.1% prior; ex-autos/gas jumped to 0.7% from 0.3% prior. Basically every retail sales category rose, excepting furniture (-1.4%), electronics (-3.3%), and gasoline (-1.6%, very much price-related).
  • One surprise is that auto vehicle sales - the single largest retail category - printed only flat M/M growth, whereas most analysts had expected a bigger rebound from a soft September (-0.3%).
  • Also notable was a strong 1.0% M/M growth in food services/drinking places, the fastest rate of growth since November 2023 - which as the only services consumption category in the retail sales report is a positive sign for Services PCE as well.

 

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The standout from the much-stronger-than-expected September retail sales report is the jump in the control group to 0.7% M/M vs 0.3% expected - that alone will result in upped Q3 GDP growth forecasts. It's the 3rd highest monthly print of the year and a 3-month high (0.3% prior).

  • With five very solid months in a row (averaging 0.5% M/M growth), nominal control group 3M/3M (ie quarterly) annualized control group expansion is now running at 6.4% - that's the fastest for any month since Q1 2023, when real PCE goods consumption printed a 7.4% Q/Q annualized growth rate.
  • Headline retail sales rose by 0.4%, up from 0.1% prior; ex-autos/gas jumped to 0.7% from 0.3% prior. Basically every retail sales category rose, excepting furniture (-1.4%), electronics (-3.3%), and gasoline (-1.6%, very much price-related).
  • One surprise is that auto vehicle sales - the single largest retail category - printed only flat M/M growth, whereas most analysts had expected a bigger rebound from a soft September (-0.3%).
  • Also notable was a strong 1.0% M/M growth in food services/drinking places, the fastest rate of growth since November 2023 - which as the only services consumption category in the retail sales report is a positive sign for Services PCE as well.