U.S. Retail sales

U.S. Retail sales posted smaller than expected October gains after trimmed increases for September. Yet the August levels were boosted sharply, leaving a higher path for the level of sales in all three months despite lean October gains. The steep climb for sales from the deep cycle-low in April lost steam in October, but analysts still have a string of new all-time highs since July, and a six month stretch of monthly gains. Retail sales have bounced by 34.1% between April and October after the -21.7% drop between February and April with mandatory shutdowns, leaving sales now 4.9% above the February level. Service consumption in the GDP accounts is proving slower to recover, but today's data are good news for consumer spending the headline shortfall in October sales growth. Analysts now expect a huge Q3 GDP growth boost to 34.0% (was 33.2%) from 33.1%, though analysts've left our Q4 GDP estimate at 6.4%. Analysts now expect a $27 B boost on consumption spending. Our Q4 GDP estimate still assumes a 9.0% growth in real consumption after an estimated 41.9% (was 40.7%) pace in Q3. The business inventory report will reveal a 0.6% September sales rise after a 0.9% (was 0.6%) August rise. Today's retail sales data are consistent with a 0.8% business sales rise in next month's October report.