* Retail sales only marginally up in August after a weak July
* We believe very nice weather in August may have had an effect
* We need a rebound the coming months for private consumption to be in line with Norges Bank’s view
Retail sales have shown a weak development the last months and the trend is now sideways. We had expected an even weaker August figure, so this was slightly better than our estimate, but weaker than consensus. A possible explanation for the weak development in August may be the weather once again. We are certain that unusually nice weather had a negative effect on retail sales in July and warm and nice weather in August can have dragged down retail sales another month. But we are not nearly as convinced about this as we were on the July figure.
If this is all about the weather, we should see a rebound the coming months. We expect a rebound and Norges Bank does the same. On the contrary, if retail sales continue on this weak trend, it will mean slow growth in private consumption and a weaker economy. And in turn no rate hikes and even a rate cut can come back on the agenda.
Else today the credit growth figures were much in line with expectations. Most interesting is that credit growth to households increased to 7.2% y/y from 7.1% and shows that the debt burden continues to increase. This is something Norges Bank still worries about, but maybe less than earlier due to the other weak signals from the economy.
Details:
Retail sales 0.2% m/m (s/a) in August after -1.4% m/m in July. Consensus +0.8% m/m and Nordea -0.5% m/m.
Total credit growth 6.2% y/y in August, up from 6.1% in July. Nordea and consensus 6.1%. Household credit 7.2%, up from 7.1 %. Corporate credit growth 3.9%, down from 4.0%.
Nordea