U.S. retail sales revealed the expected September bounce
U.S. retail sales revealed the expected September bounce after tiny revisions in still-weak July and August readings, though lean core retail sales slightly trimmed Q3 and Q4 GDP prospects. The resumed oil price climb allowed a 2.4% surge in gas station sales, alongside a 1.1% auto bounce that chased a 4.4% September vehicle sales rise, and a 1.4% building material sales increase after declines in the prior two months that were trimmed with today's report. Analysts still expect a Q3 GDP growth clip of 2.5% with a 2.7% pace for real consumption, following Q2 growth of 1.4% for real GDP and 4.3% for real consumption. For Q4, analysts still expect 2.5% GDP growth, but analysts lowered our consumption growth forecast to 1.8% from 1.9%. Analysts assume a 0.6% September PCE rise in nominal terms with a 0.2% rise in "real" terms, alongside a 0.3% PCE chain price rise that chases our 0.4% CPI estimate. The business inventory report later this morning will reveal a 0.2% August sales rise after a 0.3% (was 0.2%) July drop. Today's data are consistent with a 0.5% business sales rise in next month's September report.