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Fast Comment SwedenRetail sales in December

  1. Weaker than expected in December, but previous two months revised up
  2. Retail sales boosted by strong consumer confidence
  3. Household consumption likely to turn out less buoyant than current retail sales
Weaker than expected in December, but previous two months revised up
At first glance, the December data for retail sales show weaker growth than we had estimated (3.3 vs. 4.3 percent, calendar adjusted, y-o-y). However, as is common with the monthly retail data, each new release causes revisions in the seasonally and calendar adjusted series. This time, October and November have been revised up, taking the quarterly average growth to roughly 3.5 percent, only slightly lower than what our forecast would have implied together with the previous time series vintage.
Retail sales boosted by strong consumer confidence
Yesterday, we saw consumer sentiment holding up very well in the face of recent house price falls. This better-than-normal confidence among households is bolstering retail sales growth, which is trending upward. This seems to have spilled over into retail sector confidence, which has risen since 2016.
Household consumption likely to turn out less buoyant than current retail sales
The previous two quarters were retrospectively downgraded, as the definitive retail sales statistics were assembled. There is a risk that this happens to Q4 2017 as well. Also, when judging the outlook for total household consumption, many more factors come into play. For instance, new car registrations are cooling. All in all, we do not see the currently quite healthy retail sales readings as a risk to our consumption forecast.

 Retail sales boosted by strong consumer confidence




 Retail sector confidence increasing


Source: Macrobond


 But remember that households' total consumption is more than retail sales


Source: Handelsbanken and Macrobond


Disclaimer

Johan Löf

Senior Economist

Sweden

jolo22@handelsbanken.se

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