Economists were looking for a rebound in retail sales, but they didn't get it. Headlines informed that February retail sales fell by 0.6% instead of increasing by 0.2%, as forecasted. Lower gasoline prices influenced the drop noted in headlines, but sales excluding autos and gasoline fell by 0.2% instead of increasing by 0.5%. February's numbers were simply lousy.
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Certainly weather played a factor, but I don’t think it's all about the weather. Consumers just aren’t in the mood to ramp up spending. They are spending more on cars and eating out — dining and lodging is not included in retail sales data — but they are not increasing their spending on other goods. The reason why remains a mystery.
On the bright side, U.S. weekly jobless claims fell from 320,000 to 289,000, beating an expected drop to 305,000.
The retail sales number had a mixed impact on the markets. The stock market shook it off completely. Dow futures were up 75 points before the number and are now up 80 points. Stocks got a modest lift on Thursday morning on some stability in the euro. The euro remains under the microscope, and the euro is actually up fractionally for the first time this week.
CLICK HERE to read about the Treasury 10-year yield and results from the first few days of the European Central Bank's bond buying program.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.