- Furniture and appliance sales rise 5% after two deep declines
- Rising joblessness and high rates still weighing on confidence
Brazil’s retail sales unexpectedly rose in February by the most since July 2013, carried by a surprise surge in sales of furniture and appliances.
Sales rose 1.2 percent in February after a revised 1.9 percent drop in the prior month, the national statistics agency said Tuesday. That was more than all but two estimates from 34 economists surveyed by Bloomberg, whose median forecast was for sales to remain flat. Sales fell 4.2 percent in February versus the same month in 2015.
Consumer confidence has recently increased from its historic low as inflation returned to the single digits and is expected to slow further. The currency at its strongest level since August has also helped tamp down prices of imported goods. Rising joblessness, the highest interest rates in nearly a decade and uncertainty related to the ongoing impeachment process of President Dilma Rousseff are still weighing on confidence, however.
“It tends to be much more a fluctuation around a downward trend than a trend reversal point,” Jankiel Santos, chief economist at Haitong in Sao Paulo who forecast a 1.3 percent jump in sales, said about the data. “When we look at the labor market we’re not seeing any type of improvement, therefore wage adjustments aren’t going to be that good and we still have high inflation, so purchasing power tends to go down.”
Swap rates on the contract due January 2018 rose 5 basis point to 13.45 percent.
Furniture and appliance sales jumped 5 percent, after two monthly declines in excess of 5 percent. That was a particular surprise as leading indicators pointed to a fall from the prior month, consultancy MCM said in a note. Sales of food, beverages and tobacco products at hypermarkets and supermarkets rose 0.8 percent in February, marking the first increase in four months.
At retailer Pao de Acucar, food sales beat estimates in the first quarter, signaling a possible turning point for same-store sales in its food division, UBS analysts including Gustavo Oliveira wrote in a report Tuesday.
Yet the surprise jump in February sales was insufficient to offset the large contractions recorded in December and January, Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., wrote in a note.
“Despite the positive February print, the near-term outlook for private consumption and retail sales remains challenging,” Ramos said.
Broad retail sales climbed 1.8 percent from the prior month. Sales of cars, car parts and motorcycles, which are included in broad sales, rose 3.8 percent.