Analysts at Nomura explained that Core (“control”) retail sales increased a healthy 0.4% m-o-m, below their expectations but in line with the market consensus (Nomura: 0.5%, Consensus: 0.4%).
“However, January and February core retail sales were revised downwards, implying weaker-than-expected momentum in Q1 personal spending. The solid increase in March core sales was likely boosted by the delayed arrival of tax refunds relative to historical trends, which may have shifted spending from January and February to March.”
GDP tracking update:
“Although March core retail sales were broadly in line with our expectations, downward revisions to January and February core sales imply modestly weaker momentum in personal consumption expenditure in Q1 relative to our tracking model. Therefore, we lowered our Q1 GDP tracking estimate by 0.1pp to 1.6% q-o-q saar after rounding.”