Bloomberg News

Retail Sales in U.S. Probably Stagnated as Jobs Cooled

April 12, 2013

Retail sales probably stagnated in March amid the smallest employment gain in nine months, showing household spending ended the first quarter on softer footing, economists said before a report today.

The value of purchases was little changed after a 1.1 percent increase in February that was the biggest gain in five months, according to the median forecast of 85 economists surveyed by Bloomberg. Other reports today may show consumer sentiment was also little changed in April and wholesale prices fell last month.

Economists project consumer spending, which accounts for 70 percent of the economy, grew in the first quarter at the fastest pace in two years as advances in January and February more than made up for the weakness last month. A pickup in hiring and bigger increases in wages will be needed to ensure any slowdown proves temporary as federal budget cuts slow growth.

“In the first quarter, consumers played a very important role in helping to support economic growth,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “If we continue to see slow personal income gains and very slow job growth, they will play less of a role later this year.”

The Commerce Department will release the retail sales data at 8:30 a.m. in Washington.

Economists’ estimates ranged from a decline of 0.6 percent to an increase of 0.7 percent.

Spending Forecast

March’s weaker sales data come after demand strengthened at the end of 2012 and into this year. Consumer spending advanced at a 1.8 percent rate from October through December, according to Commerce Department data. It rose at a 3 percent rate from January through March, the most since the first quarter of 2011, according to median projection of economists surveyed by Bloomberg this month.

Sales held up even as taxes took more from Americans’ paychecks. Congress agreed to a fiscal pact on Jan. 1 that allowed the tax used to finance Social Security to revert to 6.2 percent from 4.2 percent.

Households’ attitudes also remain steadfast. The Thomson Reuters/University of Michigan gauge of consumer sentiment, due at 9:55 a.m., was little changed in April from the prior month at 78.5. March’s 78.6 was the highest reading since November.

Offering some respite last month, gasoline prices fell in March, a time when they typically rise. Income tax returns from the Internal Revenue Service have also come in after a delay.

Not ‘Weak’

“The consumer does not feel as weak as what I’m sensing investors think,” Karen Hoguet, Macy’s Inc. (M:US) chief financial officer, said during an April 9 conference. “The very low end is struggling a bit, and the very high end is struggling a bit due to either perception or reality of increased taxes.”

Shares of the second-largest department-store chain are up 13.6 percent so far this year. The Standard & Poor’s Supercomposite Retailing Index, which includes Macy’s, has climbed 13.8 percent over the same period.

Economists nonetheless project the strength in demand during the first three months of 2013 will give way to a smaller gain this quarter. Consumer spending will probably slow to a 1.8 percent pace from April through June, according to the Bloomberg survey of 59 economists taken from April 5 to April 9.

Payrolls grew by 88,000 last month, the smallest increase since June, the Labor Department said on April 5. Average hourly earnings were unchanged in March from the prior month, the weakest showing since October.

Recent reports have added to concern that across-the-board government budget cuts, known as sequestration, will impede progress made in the job market. Reductions in planned spending, which began March 1, trim 5 percent from domestic agencies and 8 percent for the Defense Department this fiscal year.

Also today, an 8:30 a.m. release from the Labor Department will show an index of producer prices decreased 0.2 percent in March after rising 0.7 percent the prior month, according to the survey median.


                       Bloomberg Survey

================================================================
                            Retail   Retail      PPI  U of Mich
                             Sales ex-autos             Conf.
                              MOM%     MOM%     MOM%    Index
================================================================
Date of Release              04/12    04/12    04/12    04/12
Observation Period           March    March    March  April P
----------------------------------------------------------------
Median                        0.0%     0.0%    -0.2%     78.5
Average                       0.0%     0.0%    -0.2%     78.6
High Forecast                 0.7%     0.8%     0.5%     84.5
Low Forecast                 -0.6%    -0.6%    -1.1%     74.0
Number of Participants          85       69       75       69
Previous                      1.1%     1.0%     0.7%     78.6
----------------------------------------------------------------
4CAST                        -0.2%    -0.1%    -0.2%     80.0
ABN Amro                     -0.2%     ---     -0.1%     78.0
Action Economics              0.0%     0.0%     0.2%     78.0
Ameriprise Financial          0.1%     0.2%    -0.4%     78.5
Banca Aletti                  0.2%     0.2%     0.4%     ---
Banesto                       0.0%     ---      ---      78.3
Bank of the West             -0.1%     0.0%     0.1%     77.0
Bank of Tokyo-Mitsubishi      0.1%     0.2%    -0.2%     79.0
Bantleon Bank AG             -0.1%     0.0%    -0.2%     77.7
Barclays                     -0.2%    -0.2%    -0.5%     79.0
Bayerische Landesbank        -0.2%     0.1%    -0.3%     77.2
BBVA                          0.5%     ---      0.1%     79.0
BMO Capital Markets          -0.1%     0.0%    -0.4%     78.3
BNP Paribas                  -0.2%     ---     -0.5%     79.0
BofA Merrill Lynch           -0.1%     ---      ---      77.5
Capital Economics             0.0%     0.1%    -0.2%     80.0
CIBC World Markets           -0.2%    -0.1%    -0.1%     ---
Citi                          0.1%     0.1%    -0.4%     79.0
ClearView Economics           0.7%     0.8%     0.5%     ---
Commerzbank AG               -0.2%    -0.1%    -0.6%     80.0
Credit Agricole CIB           0.0%     0.1%    -0.1%     79.0
Credit Suisse                -0.1%     0.0%    -0.4%     82.0
Daiwa Securities America      0.0%     0.0%    -0.1%     78.0
Danske Bank A/S               0.1%     ---      0.1%     79.0
DekaBank                     -0.1%    -0.1%    -0.1%     80.0
Desjardins Group              0.0%     0.0%     0.0%     ---
Deutsche Bank Securities      0.3%     0.3%     0.2%     82.0
Deutsche Postbank AG          0.0%     0.1%     ---      77.0
Fact & Opinion Economics     -0.2%    -0.2%    -0.3%     77.2
First Trust Advisors         -0.1%     0.1%    -0.2%     79.0
FTN Financial                -0.2%    -0.2%    -0.3%     78.0
Goldman, Sachs & Co.          0.0%     0.0%    -0.5%     78.6
Hammer Partners SA            0.0%     0.1%     ---      79.0
Helaba                        0.0%     0.0%    -0.1%     78.0
High Frequency Economics     -0.2%    -0.2%    -0.5%     79.5
HSBC Markets                 -0.3%    -0.1%    -0.2%     80.0
Hugh Johnson Advisors        -0.1%    -0.1%     0.2%     74.0
IDEAglobal                    0.5%     0.3%     0.1%     79.0
IHS Global Insight           -0.3%    -0.3%    -0.5%     79.5
Informa Global Markets       -0.1%     0.2%     0.0%     78.6
ING Financial Markets         0.2%     0.3%     0.1%     78.0
Intesa Sanpaolo               0.0%     0.1%    -0.2%     79.0
J.P. Morgan Chase            -0.1%    -0.1%    -0.5%     79.0
Janney Montgomery Scott      -0.1%     0.0%     0.1%     ---
Jefferies                     0.0%     0.2%    -0.5%     77.0
John Hancock Financial        0.3%     0.3%     0.1%     76.0
Landesbank Berlin             0.2%     0.4%     0.2%     80.0
Landesbank BW                 0.0%     ---      0.1%     77.5
Lloyds Tsb Bank               0.1%     0.2%    -0.1%     77.9
Maria Fiorini Ramirez         0.1%     0.1%     0.0%     ---
Market Securities             ---      ---     -0.5%     ---
MET Capital Advisors          0.4%     ---      0.0%     ---
Mizuho Securities            -0.2%    -0.1%    -0.2%     77.0
Modal Asset                   0.2%     ---      ---      ---
Moody’s Analytics             0.0%     0.0%    -0.1%     80.0
Morgan Stanley & Co.         -0.1%     0.0%    -0.5%     ---
National Bank Financial      -0.4%    -0.4%    -0.2%     78.0
Natixis                       0.1%     0.2%    -0.3%     77.8
Nomura Securities            -0.6%    -0.6%    -0.5%     ---
Nord/LB                       0.1%     0.1%    -0.2%     78.5
OSK Group/DMG                -0.2%    -0.2%     ---      79.0
Oxford Economics              0.3%     ---      0.2%     ---
Pantheon                     -0.4%    -0.3%    -0.3%     77.0
Pierpont Securities          -0.2%    -0.2%    -1.0%     80.0
PNC Bank                      0.2%     0.1%    -0.2%     75.0
Prestige Economics            0.1%     0.2%     ---      ---
Raiffeisenbank International -0.2%    -0.4%    -1.0%     ---
Raymond James                 0.0%     0.0%    -0.7%     79.0
RBC Capital Markets          -0.2%    -0.2%    -0.4%     79.0
RBS Securities                0.1%     0.1%    -1.1%     80.0
Regions Financial            -0.1%     0.0%    -0.2%     ---
Santander                     0.0%     ---      ---      76.0
Scotiabank                    0.0%     0.1%     ---      77.0
SMBC Nikko Securities         0.2%     0.3%     0.2%     80.0
Societe Generale              0.1%     0.2%    -0.3%     84.5
Southern Polytechnic State   -0.1%     ---      ---      ---
Standard Chartered Bank       0.1%     ---     -0.1%     78.5
Stone & McCarthy              0.1%     0.1%     0.1%     78.5
TD Securities                -0.2%    -0.2%    -0.3%     77.4
UBS                           0.0%     0.1%    -0.3%     80.0
UniCredit Research            0.0%     ---      ---      83.0
Union Investment              0.0%     ---      0.2%     78.5
University of Maryland        0.2%     0.1%    -0.2%     78.0
Wells Fargo & Co.             0.1%     0.1%    -0.3%     ---
Westpac Banking Co.           0.1%     ---      0.5%     78.0
Wrightson ICAP               -0.3%    -0.2%    -0.7%     77.0
================================================================

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

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


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Companies Mentioned

  • M
    (Macy's Inc)
    • $56.21 USD
    • -0.36
    • -0.64%
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