Retail Sales in U.S. Probably Rose First Time in Four Months

Photographer: David Paul Morris/Bloomberg

Pedestrians pass in front of a Gap Inc. store in San Francisco. Close

Pedestrians pass in front of a Gap Inc. store in San Francisco.

Close
Open
Photographer: David Paul Morris/Bloomberg

Pedestrians pass in front of a Gap Inc. store in San Francisco.

Retail sales in the U.S. probably rose in July for the first time in four months, alleviating concern that the expansion was foundering, economists said before a report today.

The 0.3 percent increase in purchases would follow a 0.5 percent drop in June, according to the median forecast of 85 economists surveyed by Bloomberg News. Another report may show prices paid by producers rose last month.

Improved sales at merchants such as Gap Inc. and TJX Cos. indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, joblessness in excess of 8 percent is keeping consumer spending from surging, consistent with the Federal Reserve’s view that economic growth will “remain moderate over coming quarters.”

“Consumers are cautious,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut. “Despite a better report than the prior couple of months, you can’t get too excited about spending because the third quarter is still starting off at a pretty slow pace.”

The Commerce Department will release the figures at 8:30 a.m. in Washington. Economists’ estimates ranged from a decline of 0.2 percent to a gain of 0.7 percent.

The report will also show the retail sales category used to calculate gross domestic product, which excludes sales at auto dealers, building material stores and service stations, rose 0.5 percent in July compared with a 0.1 percent decline the prior month, according to the economists surveyed.

Photographer: Sam Hodgson/Bloomberg

A shopper carries a Giorgio Armani SpA Armani Exchange bag in downtown La Jolla, California, on July 27, 2012. Close

A shopper carries a Giorgio Armani SpA Armani Exchange bag in downtown La Jolla,... Read More

Close
Open
Photographer: Sam Hodgson/Bloomberg

A shopper carries a Giorgio Armani SpA Armani Exchange bag in downtown La Jolla, California, on July 27, 2012.

Spending Cools

The pickup in retail sales last month follows a quarter in which household spending grew at the slowest pace in a year. Consumer purchases, about 70 percent of the economy, expanded at a 1.5 percent annual rate from April to June, according to Commerce Department data.

In July, same-store sales at the more than 20 companies tracked by Retail Metrics Inc. rose 4.4 percent, almost four times analysts’ estimates, after a 0.3 percent gain in June.

Sales at Gap, the biggest U.S. specialty-apparel retailer, climbed 10 percent last month from the same period in 2011. Macy’s Inc., the owner of its namesake and Bloomingdale’s department stores, posted a 4.1 percent increase.

“This month we saw broad-based strength across the U.S.,” Sherry Lang, spokeswoman for TJX, said during an Aug. 2 sales conference call. Same-store sales at the owner of the Marshalls and T.J. Maxx chains rose 7 percent in July.

Retail Shares

Retail shares have outperformed the broader market this year. The Standard & Poor’s 500 Supercomposite Retailing Index has climbed 19 percent since Dec. 30, compared with a 12 percent gain in the S&P 500.

Photographer: Sam Hodgson/Bloomberg

A shopper walks in downtown La Jolla, California, on July 27, 2012. Close

A shopper walks in downtown La Jolla, California, on July 27, 2012.

Close
Open
Photographer: Sam Hodgson/Bloomberg

A shopper walks in downtown La Jolla, California, on July 27, 2012.

Underpinning the stronger sales, payrolls increased by 163,000 in July, the most in five months, according to Labor Department figures. While the improvement eased fears the U.S. labor market may continue stumbling following the second-quarter slowdown, the jobless rate rose to 8.3 percent.

Economic growth slowed to a 1.5 percent annualized pace in the second quarter from 2 percent in the first.

“As we head into the much larger second half of the year, we are mindful that the macro environment remains pressured and uncertain,” Harlan Kent, chief executive officer of Yankee Candle Co. Inc., which sells its products to retailers like Macy’s and Target Corp., said on an Aug. 9 conference call. “We expect cautious consumer spending.”

Fed policy makers said on Aug. 1 they are prepared to take additional action if necessary to boost growth and reduce a jobless rate that’s been stuck at 8 percent or higher for more than three years.

Also today, an 8:30 a.m. report from the Labor Department will show an index of producer prices increased 0.2 percent in July from a month earlier, according to the survey median.

                         Bloomberg Survey

================================================================
                               PPI     Core   Retail   Retail
                                        PPI    Sales ex-autos
                              MOM%     MOM%     MOM%     MOM%
================================================================

Date of Release              08/14    08/14    08/14    08/14
Observation Period            July     July     July     July
----------------------------------------------------------------
Median                        0.2%     0.2%     0.3%     0.4%
Average                       0.2%     0.2%     0.3%     0.3%
High Forecast                 0.6%     0.3%     0.8%     0.7%
Low Forecast                 -0.2%    -0.1%    -0.2%    -0.2%
Number of Participants          78       74       85       76
Previous                      0.1%     0.2%    -0.5%    -0.4%
----------------------------------------------------------------
4CAST                        -0.1%     0.2%     0.4%     0.4%
ABN Amro                      0.2%     0.2%     0.3%     ---
Action Economics              0.3%     0.2%     0.3%     0.4%
Aletti Gestielle              ---      ---      0.2%     0.3%
Ameriprise Financial          0.2%     0.2%     0.4%     0.4%
Banorte-IXE                   ---      ---      0.2%     ---
Bantleon Bank AG              0.4%     ---      0.3%     0.3%
Barclays                      0.2%     0.2%     0.2%     0.3%
Bayerische Landesbank         0.3%     ---      0.1%     0.2%
BBVA                          0.2%     0.2%     0.2%     0.3%
BMO Capital Markets           0.2%     0.2%     0.2%     0.3%
BNP Paribas                   0.1%     0.2%     0.2%     0.2%
BofA Merrill Lynch            0.3%     0.2%     0.2%     0.2%
Briefing.com                  0.2%     0.2%     0.0%     0.0%
Capital Economics             0.4%     0.2%     0.2%     0.4%
CIBC World Markets            0.0%     0.2%     0.4%     0.4%
Citi                          0.5%     0.2%     0.3%     0.3%
ClearView Economics           0.1%     0.1%     0.4%     0.5%
Comerica                      0.4%     0.2%     0.3%     0.3%
Commerzbank AG                0.4%     0.2%     0.1%     0.2%
Credit Agricole CIB          -0.2%     0.2%     0.4%     0.4%
Credit Suisse                 0.6%     0.2%     0.3%     0.5%
Daiwa Securities America      0.0%     0.2%    -0.2%    -0.2%
Danske Bank                   0.2%     0.2%     0.3%     0.4%
DekaBank                      0.2%     0.2%     0.3%     0.4%
Desjardins Group              0.2%     0.2%     0.3%     0.3%
Deutsche Bank Securities      0.2%     0.2%     0.4%     0.5%
Deutsche Postbank AG          0.2%     0.2%     0.1%     0.2%
DZ Bank                      -0.1%    -0.1%     0.2%     0.3%
Exane                         0.1%     0.2%     0.4%     0.5%
First Trust Advisors          0.1%     0.2%     0.3%     0.5%
FTN Financial                 0.2%     0.2%     0.5%     0.4%
Goldman, Sachs & Co.          0.0%     0.0%     0.3%     0.3%
Helaba                        0.2%     0.2%     0.1%     0.3%
High Frequency Economics      0.4%     0.2%     0.4%     0.4%
Horizon Investments           0.3%     0.3%     0.5%     0.6%
HSBC Markets                  0.3%     0.2%     0.3%     0.3%
Hugh Johnson Advisors         0.4%     0.1%     0.3%     0.4%
IDEAglobal                    0.3%     0.2%     0.5%     0.6%
IHS Global Insight            0.6%     0.1%     0.3%     0.4%
Informa Global Markets       -0.1%     0.1%     0.6%     0.5%
ING Financial Markets         0.2%     0.2%     0.3%     0.5%
Insight Economics             0.3%     0.2%     0.2%     0.4%
Intesa Sanpaulo               0.3%     0.2%     0.4%     0.4%
J.P. Morgan Chase             0.2%     0.2%     0.2%     0.4%
Janney Montgomery Scott       0.5%     0.0%     0.1%     0.3%
Jefferies & Co.               0.2%     0.2%     0.5%     0.6%
John Hancock Financial        0.1%     0.0%     0.3%     0.3%
Landesbank Berlin             0.1%     0.0%    -0.2%    -0.1%
Landesbank BW                 ---      ---      0.2%     ---
Lloyds Bank                   0.2%     0.2%     0.4%     0.4%
Maria Fiorini Ramirez         0.2%     0.2%     0.3%     0.4%
Market Securities             0.3%     0.2%     0.3%     ---
MET Capital Advisors          0.2%     ---      0.8%     ---
Mizuho Securities             0.2%     0.1%     0.1%     0.1%
Modal Asset                   ---      ---      0.4%     ---
Moody’s Analytics             0.4%     0.1%    -0.1%    -0.1%
Morgan Stanley & Co.          0.3%     0.1%     0.1%     0.5%
National Bank Financial       0.2%     0.2%     0.5%     0.6%
Natixis                       ---      ---      0.0%     0.3%
Newedge                       0.1%     0.2%     0.4%     0.5%
Nomura Securities             0.2%     0.2%     0.0%     0.1%
OSK Group/DMG                 ---      ---      0.2%     0.3%
Pierpont Securities           0.5%     0.3%     0.2%     0.5%
PineBridge Investments        0.2%     0.1%     0.4%     0.4%
PNC Bank                      0.5%     0.2%     0.1%     0.2%
Raiffeisenbank International -0.1%     0.2%     0.2%     0.3%
Raymond James                 0.5%     0.2%     0.2%     0.3%
RBC Capital Markets           0.3%     0.2%     0.3%     0.3%
RBS Securities                0.6%     0.2%     0.2%     0.3%
Regions Financial             0.3%     0.2%     0.3%     0.4%
Renaissance Macro Research    0.1%     0.1%     0.3%     0.3%
Scotiabank                    0.1%     0.1%     0.2%     0.3%
SMBC Nikko Securities         0.3%     0.3%     0.4%     0.4%
Societe Generale              0.0%     0.2%     0.4%     0.7%
Standard Chartered            0.2%     0.2%     0.4%     ---
Stone & McCarthy              0.2%     0.2%     0.4%     0.4%
TD Securities                 0.1%     0.2%     0.2%     0.1%
UBS                           0.4%     0.2%     0.3%     0.3%
UniCredit Research            ---      ---      0.2%     ---
Union Investment              0.3%     ---      0.3%     ---
University of Maryland        0.4%     0.2%     0.3%     0.3%
Wells Fargo & Co.             0.2%     0.1%     0.2%     0.4%
Westpac Banking Co.           0.3%     0.1%     0.1%     0.3%
Wrightson ICAP                0.2%     0.2%     0.4%     0.6%
================================================================

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.