U.S. retail sales beat estimates via upward revisions
U.S. retail sales beat estimates via upward revisions in already-robust gains for both October and November, before largely expected December headline and ex-auto retail sales increases of 0.4%. Analysts saw an expected lift from sales of building materials, alongside a smaller than assumed auto sales rise, but a flat gasoline sales figure despite a big 2.7% price drop in the accompanying CPI report. Four consecutive big retail sales gains into December document a solid 2017 holiday sales season, and analysts've boosted our Q4 GDP growth estimate to 2.8% from 2.6%, with a 3.5% (was 3.2%) growth pace for "real" consumption. Analysts assume a 0.5% December PCE rise in nominal terms with a 0.4% (was 0.3%) "real" increase, alongside a 0.1% PCE chain price gain that matches the CPI rise. The savings rate should fall to a 2.4% new expansion-low from a 2.9% prior expansion-low in November, versus a 3-year high of 6.3% in October of 2015. The business inventory report later this morning will reveal a 1.2% November sales surge after big gains of 0.8% (was 0.7%) in October and 1.6% in September. Today's retail sales data are consistent with a 0.5% business sales rise in next month's December report.