US retail sales to show continued consumer comeback

US retail sales rebounded in May, erasing concerns about the earlier weakness in consumer demand. Although June sales are unlikely to match May's strength, the data is likely to be solid nonetheless. 

Societe Generale states "A 0.4% m/m rise in overall retail sales is anticipated, with the ex-auto aggregate rising by 0.9% m/m. Likewise, th gasoline sales were expected to be up 5.1% in June, driven by a 4.9% seasonally adjusted price gain. After stripping out gas station sales, sales should be up by a still respectable 0.4%. Finally, excluding an expected modest gain in building material sales, we expect the "retail control" aggretate to post a 0.3% m/m increase." 

This would push the 3m annualized growth rate to 5%, significantly above the 1% annualized growth rate reported in Q1. 

"If our retail sales projection comes to fruition, it would imply that personal consumption increased by 0.4% in June. Although inflation will 'eat up' about 0.3% of the projected gain, the net result should nonetheless be positive. Our forecast is consistent with real PCE expanding by 0.1% m/m in June and by 3.0% annualized in Q2", according to Societe Generale.