Fake News: A Perfectly Good Retail Sales Report (#GotBitcoin?)
U.S. retail sales disappointed in February, but the overall picture is surprisingly strong. Fake News: A Perfectly Good Retail Sales Report (#GotBitcoin?)
Fake News: What initially looked like a bad retail sales report was actually pretty good.
Retail sales fell 0.2% in February from a month earlier, the Commerce Department reported on Monday, falling well short of the 0.2% gain economists were calling for. Excluding auto sales, the drop was an even-worse 0.4%; economists were looking for a 0.4% increase.
But sales figures for January were revised substantially higher. They now show an overall gain of 0.7%, which compares with an initially reported gain of just 0.2%. The effects of the government shutdown, worries about the stock market, and inclement weather didn’t weigh as heavily on January sales as they first appeared.
That isn’t to say that the first quarter wasn’t soft. As a result of the steep retail decline in December, the starting point for spending this year was low relative to the fourth-quarter average. That, in turn, will weigh on gross domestic product growth in the first quarter.
How weak won’t be entirely apparent until March retail sales data comes out later this month. There is some hope for improvement. Tax refunds were delayed by the government shutdown so money that would typically have been received, and spent, in February, likely got spent in March instead.
And what about the second quarter? Hiring is strong, unemployment is low. and wages have been gaining ground—all of which ought to continue to support spending. Sales might not be poised for a massive surge, but worries that consumers were throwing in the towel probably will be unfounded.
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