Retail sales came in unexpectedly strong at -1.5%, reversing only part of the cash-for-clunkers induced +2.7% from August, for a net gain of 1.2% in two months. Ex autos retail sales were up +.5%, for a 1.6% gain in the last two months. This is particularly encouraging, since as the doomers have been incessantly telling us, consumer access to credit has been more limited. In short, this gain has come from consumers spending cold, hard, saved cash.
Since bottoming in April, retail sales are up 2.7%. Ex-autos they are up 1.8%. And no, you can’t just put this down to oil prices either. They’ve been stagnant since April.
Meanwhile, Marketwatch also reported that:
U.S. businesses reduced their inventories at the fastest pace on record in August ....
The inventory-to-sales ratio fell to 1.33 in August from 1.36 in July
This inventory/sales ratio equals that at the end of 2003, the time by which the last "jobless recovery" had finally morphed into an actual "jobs recovery."
I pointed out a couple of weeks ago that Real Retail Sales are the "Holy Grail" leading indicator of future employment. Simply put, historically, increased consumption has always, always, always, led to jobs. Today's data means that there is both demand strength and supply tightness -- about as good a precursor as you can get for jobs improvement soon.
P.S. I pre-emptively submit the above to Invictus as a counter-demonstration of business activity and "green shoots."
From Bonddad: The internals of this report were surprisingly strong. Consider this chart from the report:
Click for a larger image.
Car sales were down 10.4%. This was expected as the cash for clunkers expired. But notice the only other activity to decrease was sales of building materials and garden supplies (think Home Depot and Lowe's), misc. store retailers and non-store retailers. That's a good sign.