US: Total retail sales to slip 0.1% m/m lower - TDS

Research Team at TDS, suggests that a relatively healthy advance in US core retail activity in August will be masked by a sizeable drop in industry-reported auto sales and the price of gasoline.

Key Quotes

“TD is in line with consensus and looks for total retail sales to slip 0.1% m/m lower, while ex-autos and core retail sales should post a gain of 0.2% m/m and 0.4% m/m, respectively; all in line with consensus.

Industrial production for August is expected to decline by 0.2% m/m (both TD and market) due to weaker employment data in the manufacturing sector, taking some of the shine off the 0.7% advance in July.

Capacity utilization should edge lower on the decline, with TD and the market calling for 75.6% and 75.7%, respectively. Meanwhile, TD looks for Empire manufacturing to rebound in August back into expansionary territory at +1.0 from -4.2 while the market expects a more modest improvement to -1.0.

The August Philly Fed Index will be released simultaneously, though little change is expected from the +2.0 reading last month. TD looks for a +1.5 print while the market is slightly lower at +1.0.

Initial jobless claims are expected by the market to remain subdued at 265k, slightly higher than the 259k pace last week. The market looks for both headline and core producer prices should post a 0.1% m/m advance in August; TD is in line on the headline index though we see core prices slightly firmer at +0.2% m/m. Lastly, the market expects business inventories to increase by 0.1% m/m in July.”