Synopsis:

Bank of America expects a robust US retail sales report for March, driven by favorable seasonal adjustments and resilient consumer spending. The control group, which feeds directly into GDP estimates, is projected to rise 0.6% month-over-month, aligning with consensus.

Key Points:

• Headline and Core Retail Growth:

  • BofA forecasts retail sales to rise 1.2% m/m, slightly below the 1.4% Bloomberg consensus.

  • Excluding autos, BofA sees a 0.5% m/m gain, above the 0.3% consensus.

  • Excluding both autos and gas, BofA projects a 0.8% m/m increase, well ahead of the 0.3% consensus.

• Control Group Strength:

  • The control group (ex-autos, gas, building materials, and restaurants) is expected to rise 0.6% m/m, in line with consensus.

  • This segment is a key input into GDP models and signals strength in core consumption.

• Seasonal Tailwinds:

  • BofA highlights favorable seasonal effects that typically boost March readings, and expects this year to follow a similar trend.

Conclusion:

BofA anticipates strong consumer activity in March, particularly in the control group, reinforcing expectations for resilient Q1 GDP growth. While headline sales may fall short of consensus, the strength in underlying categories suggests that consumer demand remains solid despite macro uncertainty.