Monday, April 14, 2008

Retail sales hanging in there

The latest monthly retail sales report continues to indicate a "sluggish" economy, but is not exactly exhibiting full-blown recessionary behavior. Retail sales in March rose slightly and the decline in February was revised to a smaller decline. Over the Janurary to March three-month period retail sales rose at a 2.9% annualized rate. But those are nominal prices and are not adjusted for inflation. The most recent 3-month consumer inflation rate (for December, January, and February) was 3.1%, so real retail sales are roughly down slightly (2.9% minus 3.1% is -0.2%), but that is still not a "significant" decline. The consumer inflation rate for March and for the 3-month period ending with March will be out on Wednesday.

The main takeaway from this report was that we did not see signs of a worsening recession. And, we see a hint of a possible recovery from the dip in February. The strongest statement we can make about this report is that it is inconclusive.

-- Jack Krupansky

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