Retail Sales Weren’t All That Bad, Meaning They Were The Worst

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Taken in comparison to the last few years, today’s retail sales report wasn’t that bad. Total sales for May 2017, including autos, grew by 5.17% year-over-year (NSA). That was the highest growth rate since last February. The 6-month average is now just shy of 4%, the best since early 2015. It is clear the US economy has shrugged off the effects of last year’s downturn.
What got most people’s attention was the negative monthly comparison in the seasonally-adjusted data. Even here, however, the reaction seems a little hyper-sensitive. Though down 0.3% month-over-month, retail sales in April were up by 0.4%. It’s not so much the downside as it is being far too uneven in the advance.
If we are identifying a trough using retail sales, the bottom was clearly January 2016. It only makes sense given all that was going on at that moment in time. But that means, in June 2017 analyzing the economy with statistics from May, that nearly a year and a half has already passed since that point. There is clearly improvement and positive action; it just isn’t working out the way it is supposed to.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ June 14, 2017.