Bloomberg News

U.S. Retail Sales Probably Rose

April 16, 2012

Shoppers in New York. Photographer: Jin Lee/Bloomberg

Shoppers in New York. Photographer: Jin Lee/Bloomberg

Retail sales in the U.S. probably rose in March, showing consumers are weathering the jump in gasoline prices, economists said before a report today.

The 0.3 percent rise in purchases would follow a 1.1 percent advance in February that was the biggest in five months, according to the median forecast of 71 economists surveyed by Bloomberg News. A separate report may show manufacturing in the New York region grew.

An improving job market is boosting incomes and giving households enough confidence to sustain spending in the face of higher fuel costs, a sign sales at chains like Gap Inc. (GPS:US) and Target Corp. (TGT:US) will keep rising. Combined with gains in factory production, better consumer demand raises the odds that the expansion in the world’s largest economy will endure.

“Retail sales are going to end the quarter on a positive note,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Underlying job growth is decent.”

The Commerce Department will release the sales report at 8:30 a.m. in Washington. Economists’ estimates ranged from no change to a gain of 0.9 percent.

At 8:30 a.m., the Federal Reserve Bank of New York may report its general economic index cooled to 18 this month after a 20.2 reading in March that was the highest since June 2010, according to the survey median. Readings greater than zero signal growth.

Vehicle Sales

The slower pace of retail sales in March from the previous month is probably due mostly to a slowdown in auto purchases, economists said. Cars and light trucks sold at a 14.3 million annual rate in March, following a 15 million pace the prior month, according to Ward’s Automotive Group. Nonetheless, the March figures capped the strongest quarter in four years.

“The industry and consumers have been very resilient in the face of higher pump prices,” Don Johnson, vice president of U.S. sales at General Motors Co. (GM:US), said on a call with analysts this month. “The steadily improving economy is playing a role and so is pent-up demand and an improved credit market.”

The Commerce Department’s report may show purchases excluding auto dealers climbed 0.6 percent after a 0.9 percent gain in February.

Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics rose 3.9 percent last month, beating the average estimate for a 3.3 percent gain, as many chains offered discounts and shoppers stocked up early on spring gear.

Warmer Weather

Sales may have been helped by better weather. The average temperature was 51.1 degrees Fahrenheit (10.6 degrees Celsius) in March, the warmest on record for the month in the past 117 years, according to the National Oceanic and Atmospheric Administration.

Sales at Gap, the largest U.S. apparel chain, climbed 8 percent. Target, the second-largest U.S. discount chain, and Macy’s Inc., the owner of Bloomingdale’s and namesake stores, each posted 7.3 percent increased. All three companies beat the average analyst projection.

Investors have driven up retailer shares as spending increases. The Standard & Poor’s Supercomposite Retailing Index (S15RETL), which includes Macy’s and Gap, has gained 17 percent this year through April 13, compared with a 9 percent advance for the broader S&P 500.

The Commerce Department’s retail sales data, which aren’t adjusted for prices, may also reflect higher gasoline at the pump. Regular fuel in March averaged $3.84 a gallon, or 28 cents more than in February, according to AAA, the nation’s biggest auto group.

Beige Book

The economy expanded “at a modest to moderate pace” from mid-February through late March as manufacturing, hiring and retail sales showed signs of strengthening even as fuel prices climbed, the Fed said in its Beige Book report on April 11. The central bank has pledged to keep its benchmark interest rate near zero until late 2014 to stimulate the expansion.

Among other reports today, Commerce Department figures due at 10 a.m. may show business inventories climbed 0.6 percent in February as sales improved, economists forecast in the survey.

The National Association of Home Builders/Wells Fargo index of builder confidence held at 28 in April, the same as in the prior two months which was the highest level since June 2007, economists projected. The data will also be released at 10 a.m.

                         Bloomberg Survey

================================================================
                            Empire   Retail   Retail Business
                             Manu.    Sales ex-autos     Inv.
                             Index     MOM%     MOM%     MOM%
================================================================

Date of Release              04/16    04/16    04/16    04/16
Observation Period           April    March    March     Feb.
----------------------------------------------------------------
Median                        18.0     0.3%     0.6%     0.6%
Average                       17.7     0.4%     0.6%     0.5%
High Forecast                 22.0     0.9%     1.1%     0.8%
Low Forecast                  10.0     0.0%     0.3%     0.4%
Number of Participants          50       71       61       39
Previous                      20.2     1.1%     0.9%     0.7%
----------------------------------------------------------------
4CAST                         15.5     0.5%     0.5%     ---
ABN Amro                      19.0     0.4%     ---      ---
Action Economics              18.0     0.4%     0.6%     0.6%
Aletti Gestielle              18.5     0.2%     0.4%     ---
Ameriprise Financial          18.0     0.4%     0.7%     0.6%
Banca Aletti                  18.8     0.4%     0.8%     0.5%
Bantleon Bank AG              17.5     0.2%     0.4%     ---
Barclays Capital              20.5     0.3%     0.5%     0.5%
Bayerische Landesbank         17.0     0.4%     0.9%     ---
BMO Capital Markets           18.0     0.5%     0.7%     0.6%
BNP Paribas                   18.5     0.5%     0.8%     ---
BofA Merrill Lynch            17.0     0.2%     0.4%     ---
Briefing.com                  18.0     0.0%     0.3%     0.4%
Capital Economics             ---      0.3%     ---      ---
CIBC World Markets            ---      0.2%     0.5%     ---
Citi                          ---      0.2%     0.5%     0.5%
ClearView Economics           17.5     0.2%     0.5%     0.6%
Comerica                      ---      0.3%     0.6%     0.6%
Commerzbank AG                18.0     0.3%     0.6%     0.6%
Credit Agricole CIB           20.0     0.3%     0.5%     0.5%
Credit Suisse                 ---      0.3%     0.6%     0.6%
Danske Bank                   20.0     0.3%     ---      ---
DekaBank                      16.0     0.3%     0.4%     0.6%
Desjardins Group              17.0     0.3%     0.6%     0.4%
Deutsche Bank Securities      21.5     0.5%     0.7%     0.6%
Deutsche Postbank AG          ---      0.5%     0.3%     ---
DZ Bank                       18.8     0.5%     0.7%     ---
Exane                         18.0     0.6%     ---      ---
First Trust Advisors          17.2     0.3%     0.9%     0.5%
FTN Financial                 ---      0.6%     0.7%     ---
Helaba                        15.0     0.4%     0.7%     0.6%
HSBC Markets                  15.0     0.6%     0.8%     0.6%
Hugh Johnson Advisors         22.0     0.6%     0.4%     0.4%
IDEAglobal                    19.0     0.6%     0.8%     0.5%
IHS Global Insight            20.0     0.4%     0.8%     0.4%
Informa Global Markets        21.8     0.6%     0.7%     0.4%
ING Financial Markets         17.0     0.3%     0.5%     0.7%
Insight Economics             17.5     0.2%     0.4%     0.5%
Intesa Sanpaulo               17.5     0.5%     0.5%     ---
Janney Montgomery Scott       ---      0.5%     1.1%     0.6%
Jefferies & Co.               17.0     0.6%     0.8%     0.5%
Landesbank Berlin             ---      0.2%     0.6%     0.7%
Landesbank BW                 17.0     0.1%     ---      ---
MET Capital Advisors          ---      0.9%     ---      ---
Moody’s Analytics             18.0     0.6%     0.3%     0.6%
Morgan Stanley & Co.          ---      0.6%     0.6%     ---
National Bank Financial       ---      0.2%     0.4%     ---
Natixis                       ---      0.3%     0.9%     ---
Nomura Securities             21.0     0.3%     0.4%     ---
Nord/LB                       17.5     0.1%     0.4%     ---
OSK Group/DMG                 ---      0.5%     0.6%     ---
Parthenon Group               12.4     0.5%     0.9%     0.4%
Pierpont Securities           ---      0.2%     0.5%     ---
PNC Bank                      ---      0.4%     0.6%     0.6%
Raiffeisenbank International  ---      0.4%     0.6%     ---
Raymond James                 18.0     0.3%     0.5%     ---
RBC Capital Markets           17.0     0.1%     0.4%     ---
Scotia Capital                ---      0.2%     0.5%     ---
Societe Generale              21.5     0.3%     0.6%     0.5%
Standard & Poor’s             18.0     0.4%     0.6%     0.6%
Standard Chartered            14.0     0.3%     ---      ---
Stone & McCarthy Research     13.7     0.1%     0.4%     0.8%
TD Securities                 16.5     0.1%     0.3%     0.6%
UBS                           18.5     0.2%     0.6%     0.6%
UniCredit Research            ---      0.3%     ---      ---
Union Investment              ---      0.7%     ---      ---
University of Maryland        18.2     0.6%     0.4%     0.8%
Wells Fargo & Co.             ---      0.4%     0.7%     0.5%
WestLB AG                     18.0     0.4%     0.6%     ---
Westpac Banking Co.           10.0     0.1%     ---      0.4%
Wrightson ICAP                18.0     0.3%     0.6%     0.4%
===============================================================

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


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Companies Mentioned

  • GPS
    (Gap Inc/The)
    • $38.46 USD
    • -1.68
    • -4.37%
  • TGT
    (Target Corp)
    • $71.51 USD
    • 0.32
    • 0.45%
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