US nominal retail sales likely rebounded in March on gasoline price rise

US gasoline prices increased 3% sa on monthly basis last month. With this increase, the nominal retail sales figure is likely to have expanded 0.3% m/m in March, according to Societe Generale. Nonetheless, a drag is expected to be provided by weaker than projected auto sales. Stripping auto sales, retail spending is expected to have grown strongly by 0.7%, the highest reading since May 2015, noted Socitete Generale.

Apart from the constant support from labor market, equity markets have recorded positive growth in March that should provide a moderate but optimistic wealth effect for the consumer, added Societe Generale. A weaker dollar is also helpful as foreigners will have boosted their spending in the US, especially near the Canadian border. Therefore, stripping both gasoline and auto sales is expected to have rebounded by 0.4%, said Societe Generale.

“Finally, the part of the report that feeds directly into the consumption portion of the GDP accounts, which strips out autos, gasoline, building materials and food establishments, will likely improve by 0.5%”, added Societe Generale.

Meanwhile, as of February, real personal consumption expenditure (PCE) reached an annualized rate of 1.3% in the first quarter, more than the average of Q4 2015.