Following April’s disappointing decline in US retail sales (and overnight strength in Chinese retail sales), hope was high for a rebound in May but the data was extremely noisy with April data revised dramatically higher.
Headline Retail Sales (Advance) rose 0.5% MoM in May (below +0.6% MoM expectations) but April’s -0.2% initial print was revised up to +0.3% MoM. However, on a year-over-year basis, headline retail sales growth has slowed to +3.2%.
Sales in the “control group” subset – which some analysts view as a more reliable gauge of underlying consumer demand – climbed 0.5%, topping projections, after an upwardly revised 0.4% gain. The measure excludes food services, car dealers, building- materials stores and fuel stations.
Every sales category was up in May (led by a 1.4% MoM gain in non-store retailers, i.e Amazon – +11.5% YoY) except Food and Beverage stores -0.1% and Miscellaneous store retailers -1.3%:
The upward historical revisions likely means Q2 GDP will be revised up by around 0.3%.
Is this too strong a number for The Fed’s “Goldilocks” scenario?