US: Consumption concerns - BNPP

Paul Mortimer-Lee, Chief Economist at BNP Paribas, notes that the US retail sales have disappointed two months in a row, and Michigan consumer sentiment is back to pre-election levels.

Key Quotes

“However, real figures are better than nominal.”

“Michigan expectations and consumer spending are correlated, but expectations have dropped recently. Household real income growth has slowed.”

“The autos sector has definitely decelerated. Overall weakness in consumer prices might reflect retailers competing for harder-to-get business.”

“While we would not get too worried about consumption for now, we see some warning signs and are cautious. The best days for the consumer seem to have passed, failing tax cuts.”