Brazil retail sales likely fell on an annual and monthly basis in January

January is usually a strong sales month for Brazil on a seasonal basis. However, the sharp rise in inflation in January along with the recent moderation in wages and the slight uptick in the unemployment rate are estimated to have had an adverse impact on January retail sales this time around. 

Societe Generale notes...

• We estimate Brazil retail sales to have declined by -1.5% yoy (-0.5% mom on aseasonally adjusted basis). On recent trend, therefore, we estimate continued weakness in sales and overall consumption growth. 
  
  
• In detail, the bulk of the recent weakness in sales growth could be seen in durables, such as vehicles, construction materials and household appliances. 
  
  
• This is a classic recessionary sales pattern. Looking ahead, the rising employment rate, lower wage growth and higher inflation will continue to keep real consumption growth low adding to growth woes. In fact, given the continued deterioration in the consumption outlook, our forecast of 1.0% consumption growth in 2015 looks slightly optimistic.