Wrightson ICAP Sees Decline In June Core Retail Sales

Wrightson ICAP notes, following Fed Gov Waller's comments Thursday regarding watching retail sales (and other) data ahead of the July FOMC, that "if the retail sales data are as soft as we think is possible, they might be enough to cement the case for a 75 bp move at this month’s meeting."

• They revised down their retail sales forecasts sharply last week, with the latest weekly credit card data showing a decline in the last full week of June and downward revisions to earlier periods.
• They look for core sales (ex autos/gasoline) to decline as much as 1.4%, with overall sales down "just" 0.1% amid a rebound in auto sales and strong gasoline spending. That's a far weaker outlook than consensus of +0.9% headline, +0.1% ex-auto/gas.
• All in all they see a 0.6% decline in real PCE in June, meaning basically no Q2 real consumption growth, and an early call of 0.5% Q2 GDP growth as a whole.