Expectations Are High For Tomorrow, When We Get One Of The Most Important Datapoints Of The Year

Why, because this will be the first full-month's reading that has digested the impact of the end of the payroll tax holiday.

SocGen calls it the marquee even of the week, which we think is underselling it a tad. This is a crucial datapoint at a crucial time.

Anyway, expectations are high.

Here's the preview from SocGen's Brian Jones

More consumers were working than expected in February, yet the question remains whether they were willing to part with some of their hard-earned cash? We expect the Census Bureau’s advance report on retail and food services sales to reveal that they had no problem opening their wallets last month.

Fuelled by widespread increases in non-automotive purchases, retail sales probably climbed by 0.9% in February – the largest gain since last September. Perhaps most important, retail “control” – the portion of the Census Bureau’s canvass that excludes automotive, building materials and gasoline purchases and is used by the Bureau of Economic Analysis to construct nominal goods spending estimates – is forecast to jump by 0.8%,four times the reported January gain.

Our analysis suggests that nominal outlays on goods and services gathered considerable steam in February, but a gasolineled jump in retail costs likely resulted in yet another modest uptick in real personal consumption expenditures (PCE) during the reference period.