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US oil boost still not in the spending data

According to Standard Chartered research notes, February retail sales were on the soft side, below consensus expectations. 

  • We forecast headline sales were flat m/m (consensus: 0.3%), and core sales (exauto and gas) up only 0.2% (consensus: 0.3%), the same as in January.
  • Car sales have disappointed, declining for the third straight month in February (-2.4% m/m to 16.2mn SAAR). 
  • Soft retail sales could fuel further doubts about the low-oil-price boost to spending, which we think could take more time to materialise. 
  • We also think part of the gas-pump savings have been used to repay debt, which is consistent with recent data showing moderating consumer debt.
  • We see downside risks to our 2.0% q/q SAAR forecast for Q1 GDP growth. We think the Fed will continue to blame softer Q1 growth on the weather.

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