October retail sales registered a further deceleration in growth. The control group is still showing a decent rate of y/y expansion but other groups momentum has clearly reversed from the summer pick up. The industrial production report was bleaker reading.
Tags: Retail Sales
While China’s 3Q GDP number was a little lower than expectations at 6.0% y/y the monthly production and activity series for September all improved. Retail sales growth picked up to 7.8% y/y from 7.5% while industrial activity rebounded to 5.8% y/y from 4.4% in August. Investment was perhaps the one area of disappointment, growth slowing to 5.4% y/y despite a further modest pick up on the State Owned side.
The headline numbers might have missed expectations, with retail sales falling across most measures month to month. But this is really some giveback after better figures over the summer, including upward revisions to the August numbers. This is reflected in the firming of the y/y trend we’ve seen, underlying growth looking far stronger now that it was at the start of the year.
Solid August retail sales report which build on the improvement we saw during July. Overall retail sales growth has moved up to 4.1% y/y while control group growth hit 5.3% y/y. Much of the monthly lift was due to higher auto sales, stripping that out and the recent growth rate looks more modest. But overall this is not a sign of false confidence with an increase in big ticket expenditure a positive demand sign.
While there was some deceleration in retail sales growth m/m in April the numbers still bettered consensus and looking at the y/y rates activity still looks solid. We’ve actually been in this growth range (4-6% ann. value) for pretty much the entire Brexit period, while volumes have increased more recently, after the initial hit from post-referendum inflation.
Retails sales report again providing some volatility with sales weakening following the very strong March rebound. But the overall picture is still not that bad. The y/y rate might have dipped a little but we’re still clear of the low we touched in December. The trend since then is still easy to label as ‘recovering’.
The improvement we saw in the headline activity numbers in March proved short lived with both industrial production and retail sales taking a renewed dive in April. Auto sector weakness was notably pronounced. Passenger car unit sales are down some 11% from the June 2018 peak, which is unprecedented in a developing economy with a reported growth rate as that of China.
Solid set of numbers, the positive surprise easily outweighing mild downward revisions to the February data. Consumption should have been supported by tax refund cheques, which likely helped offset the drag from higher gasoline prices,