Brazil is facing increasing headwinds. The economy is sputtering along, doing better than last year’s meager 0.9% growth, but growth forecasts are now being revised downward.
On Monday, the Central Bank’s Focus survey has the nation’s leading economists forecasting 2.2% growth from 2.5% a month ago.Nomura Secufrities actually has it coming in closer to 1.6%.
On Wednesday, retail figures showed that the Brazilian consumer is getting tired too. Inflation is high, over 6%. And unemployment, while low, is rising closer to 6% from historic lows of just 5.4% at the start of the year.
Core retail sales gained some steam in June, but they were still slightly below what the market was hoping for. Consensus was for 0.6% growth, but sales came in at a 0.5% month over month increase. Not a huge miss.
And that’s better than no growth at all in May. Retail sales are up 1.7% on the year. That’s below market estimates that had retail sales rising 2% by now.
Meanwhile, the broader retail sales index, which includes auto and construction materials, rose by 1.0% month over month from -1.2% in May, but the recovery was not enough to prevent the yearly growth rate from moving back to the negative camp of -2.0%.
The core retail sales growth trend recovered somewhat, but is still growing at a weaker pace than anticipated, printing at +0.5% over the last three months, seasonally adjusted, while the broader measure performed better at 1.4%.
Overall, Brazil’s retail sales growth trend remains mixed. Sales in supermarkets and office materials/electronics led the way down (printing at -1.1% and -5.9% respectively over the last three months). Drugstore sales (+4.5%) and fuel and lubricant (+5.4%) sales were positive surprises.
Building materials continued to moderate and fell to -0.6% over the last three months from 0.5% in May and 2.4% in April. Auto sales recovered to +1.2%.
The numbers are far from atrocious. According to Barclays Capital’s estimates, however, they are a hint that the Brazilian consumer is getting tapped out and losing confidence.
Even if today’s dataflow indicates that activity in the second quarter performed better than the first quarter, Barclays Capital analysts led by Guilherme Loureiro said in a note that he expects retail sales to soften as the labor market sheds more jobs in the months ahead, and as private credit supply and consider confidence lose momentum.
forbes.com
On Monday, the Central Bank’s Focus survey has the nation’s leading economists forecasting 2.2% growth from 2.5% a month ago.Nomura Secufrities actually has it coming in closer to 1.6%.
On Wednesday, retail figures showed that the Brazilian consumer is getting tired too. Inflation is high, over 6%. And unemployment, while low, is rising closer to 6% from historic lows of just 5.4% at the start of the year.
Core retail sales gained some steam in June, but they were still slightly below what the market was hoping for. Consensus was for 0.6% growth, but sales came in at a 0.5% month over month increase. Not a huge miss.
And that’s better than no growth at all in May. Retail sales are up 1.7% on the year. That’s below market estimates that had retail sales rising 2% by now.
Meanwhile, the broader retail sales index, which includes auto and construction materials, rose by 1.0% month over month from -1.2% in May, but the recovery was not enough to prevent the yearly growth rate from moving back to the negative camp of -2.0%.
The core retail sales growth trend recovered somewhat, but is still growing at a weaker pace than anticipated, printing at +0.5% over the last three months, seasonally adjusted, while the broader measure performed better at 1.4%.
Overall, Brazil’s retail sales growth trend remains mixed. Sales in supermarkets and office materials/electronics led the way down (printing at -1.1% and -5.9% respectively over the last three months). Drugstore sales (+4.5%) and fuel and lubricant (+5.4%) sales were positive surprises.
Building materials continued to moderate and fell to -0.6% over the last three months from 0.5% in May and 2.4% in April. Auto sales recovered to +1.2%.
The numbers are far from atrocious. According to Barclays Capital’s estimates, however, they are a hint that the Brazilian consumer is getting tapped out and losing confidence.
Even if today’s dataflow indicates that activity in the second quarter performed better than the first quarter, Barclays Capital analysts led by Guilherme Loureiro said in a note that he expects retail sales to soften as the labor market sheds more jobs in the months ahead, and as private credit supply and consider confidence lose momentum.
forbes.com
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