US Retail Sales: Months ahead may not be so smooth for the outlook – Wells Fargo

Data released on Thursday in the US, showed retail sales rose 7.5%, above the 5% of market consensus. Total retail sales are just 1.0% off its pre-virus peak, and control group 1.4% above its peak, mentioned analysts at Wells Fargo. 

Key Quotes: 

“The months ahead may not be so smooth for the retail outlook. While May and June figures benefitted from both low-base-effects as well as a gradual loosening of stay-at-home orders in many parts of the country, July will not have the same wind in its sails. The “easy gains” that were made possible from sharply curtailed spending have already been realized and the growth in both case counts and the positivity rate suggest that the loosening in stay-at-home orders could be stopped or even reversed in many states.”

“Were it not for the virus rebound, retail sales would be poised for full recovery.”

“Two major positives are still intact for the consumer spending outlook: First, households have significantly ramped up savings during quarantine and that can fuel spending in the second half of the year. Second, there is still pentup demand for services. This has been a theme of ours since the lockdown first began, and the longer the lockdowns remain in place the more the appetite is growing.”