US retail sales are likely to have come in strong in July. At the end of the second quarter, retail sales in the country recorded a strong growth and that strength is expected to have been carried over into the beginning of the third quarter. The headline data might have remained the same, weighed down by the auto sector.
Even if the auto sales are expected to have recovered moderately in July, there might have been certain payback for the weakness in unit sales and the decline in prices of vehicle in June that was unsuccessful in materializing in the retail sales report of June, noted Societe Generale in a research report.
Therefore the outlays for autos are expected to have dropped 1 percent, added Societe Generale. Moreover, sales at gasoline stations might have also fallen about 1.5 percent given the likely fall in seasonally adjusted prices in July.
However, excluding the two sectors, sales are expected to have gained 0.4 percent. In the meantime, the control group might have recorded another growth of 0.5 percent. Most the anticipated strength comes from the non-store retailers category that has recorded an average monthly growth of around 1.5 percent in 2016, according to Societe Generale.
“We envision a similar increase in July, which alone would account for half of our control group estimate. Elsewhere, both the health stores category and sales at grocery stores may also have posted increases”, said Societe Generale.
