CIBC Research discusses its reaction to today's US retail sales print for the month of April.
"US retail sales managed a solid advance in April, with the 0.9% increase broadly in line with consensus expectations and following an upwardly revised 1.4% gain in the prior month. Auto sales were a positive addition to the headline figure, picking up a modest rebound in unit sales and higher prices on the month, while restaurant spending also advanced. Gasoline sales were down, due to the temporary pull back in pump prices during the month. Sales in the control group (ex food service, autos, gasoline, building materials) increased by 1%, and on a three-month annualized basis sales in this area are up 10%," CIBC notes.
"While the increase will look less impressive after taking price movements into account, today's data still suggests that the squeeze on household incomes from inflationary pressures isn't yet having a material impact on discretionary spending. Indeed, spending on goods remains well above its pre-pandemic trend, justifying a further 50bp hike from the Fed to cool the economy at its next meeting," CIBC adds.