What, you really thought the consumer was back? Come on.
Stocks are headed lower this morning, after retail sales in March dipped by 1.1%. The number was “unexpected”, or at least it doesn’t conform to the market’s recent bout of optimism. On the other hand, both January and February were revised upwards.
Meanwhile, the timing of the Goldman Sachs (GS) stock sale looks extremely smart, since we may be looking at a pause or pullback in the rally.
The Dow has opened down about 80 points, so it’s not a huge move.
Update: Economist Richard Moody of Mission Resources has more thoughts:
In reality, the decline in retail sales in March should not have come as too much of a surprise — we and other analysts had noted that seasonal adjustment factors had made the January and February sales data seem much stronger than it actually was, and the March data reflect some payback. Also, Easter falling later this year likely had an impact on the March sales data and could make the April data look a bit better. Still, the bottom line is that the list of constraints on consumer spending is by now as familiar as it is long, and without improvement in labour market conditions — not likely until sometime in 2010 — and freer flows of credit — not likely to happen any time soon — household finances will remain under pressure and as a result consumer spending will remain weak.