Reflecting pre Japanese earthquake data, Feb Business Inventories rose .5%, below expectations of up .8%. Jan was revised up slightly but in conjunction with other recent data seen, specifically the trade data yesterday, Q1 GDP estimates are moving lower to around 2%. The inventory to sales ratio did hold at 1.24 which is just shy of a record high. The key to watch over the next year for many manufacturers that procure product from Japan is whether there will be any change in their attitudes to holding certain levels of lean inventory or will start to hold extra stuff just in case instead of just in time.
March Retail Sales were about in line with expectations and Feb was revised higher. Sales ex auto’s and gasoline rose .6% vs a .5% forecasted rise but also taking out building materials in order to get a true core figure, sales rose .4% after a 1.1% rise in Feb and .9% gain in Jan. Sales fell at department stores, online retailers and motor vehicle/parts retailers but rose in all other categories led by furniture, electronics, building materials and gas stations. While overall sales were good, last week’s solid March retail comps was the clear tip off to today’s figure. In terms of the factors influencing spending, gasoline prices rose .24 in March and in just the 1st two weeks of April have risen another .19, thus keeping all eyes on whether the recent health in consumer spending is sustainable. Job growth has been a positive offset but for those already employed, wage growth has been unfortunately lackluster.
