US retail sales remain strong in June - Wells Fargo

Analysts from Wells Fargo, today’s report on retail sales in the US that showed better-than-expected numbers points toward a very strong second quarter for spending “that should put any idea of a slowing economy to rest.”

Key Quotes: 

“The retail sales release points to a very strong consumer as the quarter came to a close, with retail sales surging 0.6 percent. True, the previously released strong print in May, at 0.5 percent, was revised downward to only 0.2 percent. However, since inflation remains contained, this means that real retail sales as well as real personal consumption expenditures should be very strong in Q2.”

“The expectation for June retail sales was low, at 0.1 percent, perhaps as a consequence of the fact that retail sales had been so strong the previous two months of the quarter. However, the results, even with the downward revision to May’s print to 0.2 percent from 0.5 percent, are still quite strong.”

“Control group sales, which go directly into the calculation of GDP, were also very strong during the month, while at the same time being upwardly revised from 0.4 percent in May to 0.5 percent. However, April control group sales were revised down from 1.1 percent to 1.0 percent, which washed out May’s upward revision. Having said this, the control sales group during the quarter was very strong and this presages a very strong performance by the U.S. consumer during the second quarter of the year. “