FXStreet (Barcelona) – Research Analysts at Nomura, note that yesterday’s US retail sales data bodes well for the consumption and GDP and supports their view for a complete rebound in Q2.
Key Quotes
“The May retail sales report paints a better picture on the status of consumer activity. Upward revision to March retail sales suggest that consumer spending was stronger in the first quarter than previously estimated. Moreover, upward revision to April and stronger-than-expected May spending numbers point to better momentum in the second quarter and better reconcile with consumer fundamentals.”
“Lower gasoline prices, optimistic consumer sentiment, improving labor market and incomes, and the elevated personal saving rate all provide fertile grounds for stronger consumption growth, and we are finally starting to see the fruits bare out in the spending data.”
“On the whole, this was a positive report on retail activity. We will see if this spreads through to broader consumer activity in the personal spending report for May (released on 25 June). The pickup in consumer activity coupled with the stronger May employment report also supports our expectation of a more complete rebound in economic activity in the second half of the year.”
“GDP tracking update: The stronger-than-expected May core retail sales with upward revisions to prior months led us to revise up Q2 GDP tracking estimate by one-tenth to 2.8% from 2.7%. A relatively substantial upward revision to core retail sales in March also pushed up Q1 GDP tracking by one-tenth to -0.4% from -0.5%.”
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