Advance Retail Sales Blast Higher
- The Census Bureau reports Advance Retail Sales jumped 9.8% percent from February, and 27.7% above March 2020.
- Total sales for the January 2021 through March 2021 period were up 14.3% from the same period a year ago.
- The Econoday consensus estimate was gain of 5.6%, and 5.0% excluding vehicles.
- Total sales jumped 9.8% and excluding vehicles sales jumped 8.4%.
Advance Sales Details
Guess What?
If you hand out free money, especially to those who are working and suffered no job loss, this is what happens.
Mish
Simply this:
“With consumers still sitting on a pile of accumulated savings combined with the expected reopening of the service economy this summer, our forecast looks for a consumer spending boom this year that will rival any in living memory for most Americans,” said Tim Quinlan, senior economist at Wells Fargo.
He may be correct or he may be wrong. The consensus reflects Tim Quinlan’s views, so I’m more than willing to take the contrary view.
Mish did lay out his deflationary thesis in a prior posting, and I think that there’s something to be said for the deflationary forces at work, especially the forces of:
The last factor cannot be overstated. Family formation drives home sales & furniture purchases. It creates demand for minivans. It generates demand for school services, sports equipment, and piano lessons. Of course, it also creates a workforce for the future.
Who needs to worry about inflation when the Fed controls the definition of inflation?
I guess the Fed could raise interest rates or Congress could raise the tax rate if inflation got out of hand
Well, since asset prices are not included in inflation, the Fed could also remove other components of inflation and define it out of existence.
More likely pent up demand. Economy is opening up. The people benefiting from the aide may not be the ones making the purchases. Or is there data?
That spike is ludicrous. Extend the sustained 2010-2020 trendline and we are way over that line. Not as far above as we were under on the March spike low in 2020, which seems appropriate. If the spike lasts, inflation would be an even greater certainty. Some are still saying inflation won’t be that bad if spending comes back to normal levels soon enough, but lumber futures vehemently disagree, as does my ability to purchase materials for a decent price.
Yet you think inflation is going to fall? Interesting…
While I personally think inflation is going to continue, the jury is still out on by how much. Especially since we don’t know if there will be any more stimmy checks, Covid UI benefits or Covid business money handed out. That’s what’s goosing the system right now and if it does stop, the economy could easily grind to a halt.