Preview: Due March 17 - U.S. February Retail Sales - Only a partial reversal of January's drop
We expect US retail sales to rise by 0.5% in February in what would be only a partial reversal of a 0.9% decline in January. Ex autos we expect a 0.3% increase after a 0.4% January decline while ex autos and gasoline we expect a 0.4% increase after a 0.5% January decline.
January weakness was blamed on bad weather but the strength of Q4 data increased vulnerability to a correction.
Weather improved somewhat in February but one very cold week is likely to provide some restraint on February sales.
Industry data shows auto sales only partially reversed a February decline. Gasoline is likely to be marginal negative in February after recording a modest increase in January.
We would not attach to much weight to signs of weakening consumer confidence. January personal income showed a substantial rise contrasting weakness in spending suggesting there is scope for sales to pick up as weather improves.
