If the omniscient chaps at BofA are right, the soft landing narrative is about to crash as they forecast a well below consensus tumble in retail sales this morning...
Source: BofA
...but notably this is mainly due to seasonals, apparently.
Once again, seasonal adjustments are likely to impact the October retail sales report. The Census Bureau's projected seasonal factor (SF) for October 2024 is considerably less favorable than the October 2023 SF. Meanwhile, the October SF in the BAC card data is little changed from last year.
Source: BofA
So, given all that, what happened!?
Well, a lot!
The headline retail sales print beat expectations rising 0.4% (+0.3% exp).
Core retail sales (ex-autos and gas) disappointed, rising just 0.1% (+0.3% exp).
But the Control Group - which is used for GDP calculations - tumbled 0.1% MoM (+0.3% exp).
BUT - the disappointments are likely driven by major upward revisions to the prior month
Headline September revised up from +0.4% MoM to +0.8% MoM.
Core revised up from +0.7% to +1.2% MoM.
Control Group revised up from +0.7% MoM to +1.2% MoM.
Source: Bloomberg
The driver of the headline beat was all cars and food...
Core retail sales growth slowed on a YoY basis...
Source: Bloomberg
On a non-seasonally-adjusted basis, retail sales jumped 6.8% MoM...
Source: Bloomberg
A real Goldilocks of a data set there - hot headline, cool core, ugly control group - take your pick, dove or hawk!
