Retail sales good but what comes next?

Feb Retail Sales were about in line with expectations at all levels of focus but positively, Jan was revised higher. Sales, ex auto’s and gasoline, rose .6% vs an expected gain of .5% and Jan was revised up by .3% to also reflect a rise of .5%. Taking out building materials also from the headline figure, sales rose .6% for a 2nd month. Auto/parts sales rose 2.3% and gains were also seen in electronics, food/beverages, clothing, sporting goods, department stores and restaurant/bars. Sales fell for online retailers, furniture and health/personal care. This data shows nominal gains and thus doesn’t reflect an increase in sales due to inflation in addition to volume. Bottom line, sales over the 1st two months of the year are good but March will be more telling in terms of how the consumer deals with higher energy prices in particular as gasoline, while trending up for months, really spiked at the end of Feb which wasn’t captured in today’s data.

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