US Retail Sales Preview: Five major banks expectations for May report

Today, the US Retail Sales report for May is due to be released at 12:30 GMT and as we get closer to that time, here are the expectations forecast by the economists and researchers of five major banks regarding the upcoming data. Most of the market specialists are expecting Retail Sales (MoM) to post-reading in between +8.1% and +11% in May, while the consensus is +8% reading. 

TDS

“We forecast an 11% MoM jump headline retail sales (+9.5% ex-auto) following the sharp 16% plunge in April. We expect control group sales to rebound 6.5% after -15% MoM. Spending probably surged as the economy started to reopen, but the level was probably still down sharply on a YoY basis (by an estimated 13%) and we caution against simply extrapolating. While wage income should keep strengthening, support from stimulus payments will fade. Separately, the pickup in industrial production in June was probably much less dramatic than the pickup in retail sales in May (TD 2.8%, consensus 3.0%). Vehicle production appears to have surged from a very low level, but mining likely fell sharply. The housing market index likely rose sharply, helped by a sizable drop in mortgage rates over the last few months.”

RBC

“Canadian retail trends stuck close to those that played out in the US through April, suggesting an expected 10% increase in US sales in May could foretell similar improvements here.”

CIBC

“Headline retail sales appear to have advanced by 8.1%, leaving them still almost 20% below where they stood prior to the crisis. Narrowing in on the control group which excludes autos, gasoline, building materials, and restaurants, sales should have registered a slightly more moderate gain of 5.5%, leaving them 8% below where they stood pre-crisis.”

NBF

“The rebound in gasoline prices and auto sales during the month hint at a partial recovery in the retail sector. That said, we don’t expect the bounce-back to erase all the losses suffered in prior months. In our opinion, headline outlays could have increased 10.0% MoM, an impressive figure no doubt but one that would leave sales far below their pre-COVID-19 level. Spending on items other than automobiles, meanwhile, could have progressed 8.5%.”

ING

“The US focus will be on how high retail sales bounce following the ending of lockdowns across many states. Given car sales numbers have rebounded strongly we expect robust retail sales (+9.5% MoM), but significant pent-up demand means we see upside for spending more broadly especially given that the uprating of unemployment benefits has boosted incomes. We expect spending on items other than automobiles to have progressed by 5.5%.”