Goldman Sachs offers insights into their expectations for tomorrow's US retail sales report, forecasting a 0.3% increase in core retail sales in December, slightly ahead of the consensus estimate of 0.2%. Their analysis takes into account various factors, including brick-and-mortar category performance, non-store sales, and the impact of COVID-19 vaccine booster wind-down on retail control growth.
Factors Influencing Core Retail Sales:
- Goldman Sachs' projection is driven by a combination of factors. They note a pickup in brick-and-mortar category sales, supported by credit card data. However, this growth is offset by a pullback in non-store sales, which had shown strength in November, as indicated by Adobe data.
Impact of COVID-19 Vaccine Booster Wind-Down:
- The wind-down of COVID-19 vaccine boosters is expected to have a modest negative effect of 0.1 percentage points on retail control growth. This reflects the changing dynamics as the pandemic situation evolves.
Expectations for Headline Retail Sales:
- Goldman Sachs also anticipates a 0.6% rise in headline retail sales for December, surpassing the consensus estimate of 0.4%. This growth is attributed to higher auto sales, although it is offset by lower gas prices.
- The outcome of tomorrow's retail sales report could have implications for financial markets, particularly in the context of inflation and consumer spending trends. Investors will closely monitor the data to gauge the health of the retail sector and its impact on the broader economy.
Goldman Sachs' analysis suggests a slightly more optimistic outlook for December's retail sales, with expectations of growth in both core and headline figures. However, they caution that several factors, including the performance of specific retail categories and the impact of COVID-19 dynamics, may influence the final results. Market participants should be prepared for potential market reactions based on the actual retail sales data tomorrow.