Today’s retail sales figures came out somewhat weaker than expected. In volume terms, sales were unchanged over the month, while we had expected a uptick from the slow Q3. Nevertheless, retail sales increased by 3.8% over the year, up from 1.6 % y/y in September, due to base effects. Durable goods rose by 4.9% y/y and non-durables by 2.4% y/y.
The rather slow trend in retail sales suggest that consumers’ willingness to spend remains subdued. Households’ savings, already the highest in Europe, thus seems to have stayed high during autumn. The cautiousness by households is somewhat surprising given solid fundamentals, such as rising incomes, strong growth in employment and increasing house prices. But prospects for next year look good and we see no reason to alter our rather optimistic view on household consumption. The trend in retail sales should pick up going forward.
Details, October
Retail sales, y/y: 3.8 % (Nordea 4.5, consensus 4.0%, prior 1.5 %
Nordea