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14 Apr 2015
US retail sales key to ease the rate hike uncertainty – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team notes that today's March retail sales report in the US is important, given the remaining uncertainty about the Fed lift off timing.
Key Quotes
“Today's March retail sales report in the US is important. Retail sales have fallen three consecutive months. Ideas that this weakness was a function of two transitory forces will be tested. Those forces are the poor weather and the pullback after the biggest shopping spree in a decade (Q4 14 consumption component of GDP).”
“Spring has sprung, more jobs equal more income, and household savings have ticked up to provide the fuel for new consumption. We also note that US consumption is not being funded new revolving credit.”
“March auto sales were strong and high gasoline prices should help lift the headline by over 1%, the most since last February-March. The components that feed into GDP calculations is expected to be up a healthy 0.5%, which would more than offset 0.3% decline seen over the past three months.”
“While the perceived odds of a June lift-off have diminished, we expect the coming data to strengthen ideas that the move takes place in September.”
“For whatever the reasons, the quarterly pattern of GDP remains intact. Over the last five years, Q1 GDP growth has averaged about 0.6% while the rest of the quarters have averaged about 2.8% at an annualized pace.”
Key Quotes
“Today's March retail sales report in the US is important. Retail sales have fallen three consecutive months. Ideas that this weakness was a function of two transitory forces will be tested. Those forces are the poor weather and the pullback after the biggest shopping spree in a decade (Q4 14 consumption component of GDP).”
“Spring has sprung, more jobs equal more income, and household savings have ticked up to provide the fuel for new consumption. We also note that US consumption is not being funded new revolving credit.”
“March auto sales were strong and high gasoline prices should help lift the headline by over 1%, the most since last February-March. The components that feed into GDP calculations is expected to be up a healthy 0.5%, which would more than offset 0.3% decline seen over the past three months.”
“While the perceived odds of a June lift-off have diminished, we expect the coming data to strengthen ideas that the move takes place in September.”
“For whatever the reasons, the quarterly pattern of GDP remains intact. Over the last five years, Q1 GDP growth has averaged about 0.6% while the rest of the quarters have averaged about 2.8% at an annualized pace.”