Itaú BBA - Retail sales decline in February

Macro Brazil

< Volver

Retail sales decline in February

abril 12, 2018

Diffusion of sectors is consistent with headline

Core retail sales dropped 0.2% mom/sa in February, disappointing the median of market expectations (0.7%) and our estimate (0.3%).

Broad retail sales (including vehicles and construction material) declined 0.1% during the month, below the median of market expectations (0.5%), but matching our call.

Broad retail sales are still positive on a quarterly basis, suggesting that household spending continues to expand in 1Q18.

For the time being, we forecast a gain of 0.1% mom/sa in broad retail sales in March.

Quarterly change is still positive

Core retail sales fell 0.2% mom/sa in February, missing the median of market expectations (0.7%) and our estimate (0.3%). Compared to February 2017, core sales expanded 1.2%.

Broad retail sales slid 0.1% mom/sa, below the median of market expectations (0.5%), but matching our call. Compared to February 2017, broad retail sales grew 5.2%. The January result was revised downward by 0.1 p.p.

In our view, the seasonally-adjusted quarterly change provides a good indicator of the recent dynamics in retail sales. Using this metric, core sales were stable in February, while broad retail sales advanced 0.7%. The positive reading suggests that household spending continued to expand in 1Q18.

Breakdown of broad retail components is consistent with the monthly reading

Six out of ten broad retail components posted seasonally-adjusted monthly increases in February, consistent with the 0.1% drop in the headline result.

Coincident indicators point to a modest increase in broad retail sales in March

Coincident indicators out so far (vehicle sales, surveys with consumers and retail entrepreneurs, Serasa retail index) suggest that broad retail sales ticked up 0.1% mom/sa in March.
 

Artur Manoel Passos
Alexandre Gomes da Cunha



< Volver