Tuesday, March 15, 2016

Retail sales: February OK, January revisions - OUCH!

 - by New Deal democrat

The slight negative report for February in retail sales is not concerning, or at least not until we find out what February inflation was in the CPI report tomorrow, especially since ex-gasoline they were up +0.2%.

But the big OUCH! was the revision in January from +0.4% to -0.2%.  Here's the dismal graph:

The big hit was in general merchandies.  In particular furniture sales, building materials, and sporting goods, and  were poor.  I don't have a good explanation, and I find this revision particularly bothersome since it contradicts the contemporaneous weekly reports.  Needless to say, any evidence that the consumer is rolling over is particularly unwelcome.

In any event, further consideration after tomorrow.

P.S.:  I see that Bill McBride is reporting a good YoY number.  He has been using the same metric for auto sales, which one a monthly basis have retreated from their late 2015 highs .  As I have repeatedly pointed out, where we have seasonal adjustments, looking at YoY numbers will miss turning points, sometimes badly.  This makes tomorrow's housing permit and starts numbers all the more important.