Strong retail sales. Continued increase in household lending.
Retail sales
Today’s number came in a touch higher than expected. Worth noting is that durable goods made significant contributions and seems to be the main driver for retails sales currently. This indicates that confidence among consumers might be growing; something that the Riksbank’s 50 bps rate cut will push further. Some positive effects might stem for the fact the World Cup took place in June as well (sales of electronics increased by 10,2 percent y/y). All-in-all, a slightly more positive reading than we had expected.
Details, June
y/y: 3.3 % (Nordea 3.2%; consensus 3.2%, prior 3.0 %)
m/m: 0.5% (Nordea +0.6%; cons. +0.4%; prior -0.7 %)
Household lending
Today’s number for June is partly obsolete since the Riksbank delivered a surprisingly large rate cut at the start of July. The coming months will be of more interest to gauge the impact on lending from lower rates. However, it may take a month or two before the full effect is visible in the data since the lending growth is also linked to turn-over in the housing market. Less activity during the summer holidays (fewer transactions) might push acceleration in lending into August or even September.
In this perspective, the higher than expected lending growth observed already in June is an indication a building of momentum in credit growth. The fact that M1 was increasing by 9.6 percent y/y in June is another signal of credit might be starting to kick in as a growth driver in a more meaningful way.
Details, June
y/y: 5.4 % (Nordea 5.1%; consensus 5.3%, prior 5.3 %)
Nordea