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Fast Comment NorwayHousehold consumption running below Norges Bank’s estimates

  1. Retail sales up 0.8 percent in July, we and consensus expected 0.6 and 0.4 percent respectively
  2. The trend is still tame and goods consumption was down sharply in July
  3. Household consumption running below Norges Bank's estimates
Retail sales up 0.8 percent in July, but trend still tame; goods consumption down sharply
Retail spending bounced back by 0.8 percent in July, whereas we had anticipated 0.6 percent (consensus: 0.4 percent). Having said that, the increase in July followed decreases of 0.3 percent in June and 1.3 percent in May. Taken together, the trend over the past few months has continued to be rather tame. Also note that the broader index of household consumption of goods fell by 1.8 percent in July, dragged down by lower car sales. This more than offset the increase in June. Overall, household consumption has proved to be rather tame this year, even though fundamentals have improved (solid expansion in employment, coupled with rising real wages). Absent any sharp increase during the second half of the year, which we have not seen any clear signs of yet, there is a clear risk that consumption growth this year will be weaker than anticipated by Norges Bank.


Marius Gonsholt Hov

Senior Economist


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