Lousy Retail Sales Report

This morning, we got a surprisingly bad retail sales report. In December, retail sales dropped 1.2%. In fact, it was so bad that some people think the numbers are just plain wrong. If the numbers are accurate, then there’s a greater chance of a recession.

Retails sales plunged 1.2 percent in December, shocking economists who expected a 0.2 percent gain.

The report immediately raised new fears of recession, but economists said the report is also so negative against other more positive data, that it appears suspect.

Even so, economists are slashing fourth quarter GDP growth estimates, and also keeping a wary eye on jobless claims, which showed a slight increase for a third week in a row.

The drop in sales raised new concerns about the consumer, which accounts for more than two-thirds of the economy.

The sudden and unexpected plunge in December’s retail sales data raised new concerns about a recession, but economists also say the biggest drop in nine years clashes with other data and may be suspect.

But nonetheless, Wall Street still took the data seriously and economists slashed fourth quarter GDP forecasts. JP Morgan cut its growth estimate to 2 percent from 2.6 percent.

“This literally came from out of left field… I thought January would have been bad,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “All our reports earlier were that holiday sales were sparkling.”

For now, I think this is a suspect report. I want to see more data that confirms this.

Posted by on February 14th, 2019 at 12:24 pm


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