In January retail sales rose 0.2% from a 1.6% decline in December revised lower from an initial report of -1.2%.
Econoday attempted to spin this as positive news.
Retail sales managed only a 0.2 percent headline gain in January after plunging a downward revised 1.6 percent in December. But when excluding autos, where sales were very weak in January, the latest month shows a very strong 0.9 percent gain that hits the top of Econoday’s consensus range. The report’s two core readings — less autos & gas and the control group — also show outstanding gains, of 1.2 and 1.1 percent respectively that reverse tremendous weakness in December at revised losses at 1.6 percent and 2.3 percent.
General merchandise is as good of place as any to find a reliable gauge to these unusual extremes and at a 0.8 percent January gain vs a 1.5 percent December loss probably puts in a nutshell the underlying message: deep and unusual weakness during the holiday season followed by a respectable bounce back. Nonstore retailers, where e-commerce is tracked, shows the same theme, at plus 2.6 percent in January vs severe contraction of minus 5.0 percent in December.
Vast swings are apparent through all readings which will have the Census Bureau double checking their adjustments. But it’s not all about adjustments. The government shutdown started late last year and proved a negative not only for consumer confidence readings which plunged but for consumer spending as well. How much has the consumer bounced back? Judging by January’s results the word “somewhat” comes to mind. But advance readings for February have not been favorable whether continued and deep weakness for auto sales or slowing growth in Redbook’s same-store sales tally.
For the first-quarter GDP outlook, today’s report is positive as it shows acceleration. For the Federal Reserve, the report is right in line with their move toward caution, waiting to see how events are unfolding.
Not Positive At All
This advance report was not positive in any way, shape, or form. Consumers have thrown in the towel on both housing and autos. The Census Department report shows motor vehicles and parts fell 2.4%.
Year-over year sales are up less than 2%. Real retail sales are flirting with zero.
Motor vehicle sales are flirting with negative numbers year-over-year.
Econoday cited the government shutdown. The BEA, however, estimated the GDP impact as 0.1%.
Perhaps there is a bounce, but it should be increasingly clear the entire global economy is slowing rapidly.
Mike “Mish” Shedlock
It’s my fault. The last pair of sneakers I bought was 18 months ago.
The “any day now” claim is bullshit – I gave timelines about 10 years ago and the only the only direction they moved is lower. No one that I know of predicted earlier. And no one ever said “any day”
Guy just opened a new Harley dealership in my burg. I live 40 minutes south of Daytona Beach and its Bike Week, so good timing on his part. I ride a 12 year old Street Glide, and those new bikes sure are pretty. Maybe it’s time for something new.
But here’s the thing: they don’t put a price tag on the bike’s anymore (at least this dealership). And they’ll take your existing bike as a trade-in. They wouldn’t do that 10 years ago. The salesman said that I throw out a number and he takes it to the sales manager, we haggle from there. That shows me that Harley-Davidson has lost all pricing power. The sales guy mentioned that $20k would be an expected starting point for discussions. I’m thinking $15k + something extraordinary for my old bike.
Harley is REALLY caught on the wrong side of demographics. Not sure if springtime in Florida is the best time to get a deal, but come fall, dealers will almost certainly be in a dealing mood.
Good. Im tired of mediocre $40k pickups.
I would wait until 2021 before buying a car, if possible. Who knows what laws the democrats might pass if they gain control of the gov’t. An SUV tax? New gas taxes?
Cars are too expensive and too complicated. Building fuel-efficient vehicles with $2.00 gasoline isn’t helping either. Add to that the technological advances are being over-hyped as “any day now” and people who might want a gadget car are waiting.
The guys the Fed handed the loot to, in the form of asset appreciation, both already have a car or twenty, and are too old and/or clueless to figure out what to do with a new gadget laden one.
While the ones still young enough to both need a car and appreciate the gadgets, were the guys the Fed robbed to enrich the former……..