Photo: Flickr / mrsdkrebs
A great retail sales report confirmed that the U.S. consumer was in better shape than everyone expected.First the scoreboard:
Dow: 14,455, +5.2 pts, +0.0 per cent
S&P 500: 1,554, +2.0 pts, +0.1 per cent
NASDAQ: 3,245, +2.8 pts, +0.0 per cent
And now the top stories:
- Retail sales jumped by 1.1 per cent in February, which was much better than the 0.5 per cent forecasted by economists. This was largely due to the rise in gas prices. However, those higher gas prices didn’t stop shoppers from buying other stuff. Retail sales excluding autos and gas climbed by 0.4 per cent, which was higher than the 0.2 per cent expected.
- This was great news. In addition to be hit by high gas prices, the consumer also absorbed a full month’s worth of the payroll tax hike.
- “We can learn two lessons from this data: 1) consumers have greater support through labour income and wealth appreciation, which has also led to greater confidence, and 2) consumers may be willing to accept a lower saving rate for a period of time,” said Bank of America Merrill Lynch economist Michelle Meyer. “The saving rate collapsed to 2.4% in January, the lowest level since prior to the crisis, and after today’s retail sales report, it appears consumers did little to build back savings in February.”
- Deutsche Bank’s Joe LaVorgna cranked up his 2013 GDP growth forecast to +2.3 per cent from +1.7 per cent. He attributed his revision to stronger-than-expected exports, surprisingly strong retail sales, and faster-than-expected inventory restocking.
- According to the Business Roundtable CEO Economic Outlook Survey, America’s CEOs have gotten significantly more bullish about the their expectations for sales and capital expenditures.
- Today’s up move in the stock market marks the ninth straight up day for the Dow. “The last time we made nine was 16 years ago,” wrote UBS’s Art Cashin. “The record is 13 – from 12/31/86 through 1/20/87. Not so easy to repeat.”
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