THOUGHTS ON THIS MORNING’S DATA
A bit of a mixed bag this morning on the data front. Consumer sentiment and retail sales appear to be at odds this as retail sales surpass expectations and sentiment comes in below expectations. Retail sales showed continuing signs of strength as the headline figure came in at 0.3% month over month versus expectations of -0.2%. Ex-autos and gasoline the data was even more impressive at 0.9%. Consumer sentiment dipped to 72.5 versus expectations of 74.
Clearly, the retail sales component of this morning’s data is more important and perhaps, more alarming. As we’ve previously noted, the U.S. consumer is still sitting on a $1.4T hole in their balance sheet. By our estimates, this means there are roughly two years of de-leveraging yet to be done. As we saw in the consumer credit report this month U.S. consumers are back to whipping out the old credit card and beginning to leverage themselves up even more. While public sector spending remains robust the private sector spending (consumer specifically) is simply not sustainable at this pace. American’s have consumed more than they’ve earned for 6 years running and it has finally come home to roost. While many view this retail sales data as a positive I am a bit more skeptical of the long-term health of the consumer based on the false idea that a continued credit binge is a positive.
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TPC:
How much of the retail sales increase do you think is attributable to the abnormally large federal tax refunds due to the refundable tax credits ?
You missed the downward revision — January revised 0.4% lower, February magically “beats” by 0.5% even though the absolute spending was basically in line (a 0.1% beat).
This is not an accident; for 15 months now, roughly 90% of all the government’s revisions to economic data have been downward. They are repeatedly manufacturing fake “beats” of month-over-month changes. Given the consistency, this cannot be unintentional.
You always underestimate the capacity of the average “mericn” for greed and gluttony. Its what they do best after all. When your life is basically a meaningless rat wheel, the only thing you have to make yourself feel better is to go buy some cheap worthless chinese made bullshit from wal mart, then turn around a cry like a little bitch because they aren’t any jobs anymore. But what the hell, I’ve been making tons on the recent rally, so fuck ‘em.
Just buy some Visa and Mastercard and call it a day. American’s are stupid. We can’t be expected to balance our checkbooks. It’s easier to spend than it is to account.
YES i HAVE MUCH MORE CON FI DENCE TODAY THAT THE E CON O MY IS MUCH BE TTOR NOW. THE FUTURE LOOKS BRIG HTER AND I HAVE THE CON FI DENCE TO CON SUME USING CREDIT.
Good Question mj. I am thinking the same thing. TPC, what do you think?
http://globaleconomicanalysis.blogspot.com/2010/03/stimulus-about-to-wither-on-vine-look.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
Looks like a repeat of yesterday. 50 point close anyone? Yawn.