By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

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March Retail Sales: It Might as Well Not Be Spring

Retail sales rose in March, but just barely, following three straight declines. Headline sales were up 0.9% in March, and February sales levels were revised up by 0.1%. However, for the more closely watched control group, which excludes cars, gasoline, and building materials, sales were up only 0.4%, and February sales levels were revised downward by 0.2%. On net, underlying sales levels in March were up only 0.2% from where we thought they were in February based on initial reports.

The accompanying chart tells the story. After an apparent pick-up last fall, retail sales have come back to ground over the last four months. Through current March data, they are only slightly above the lackluster trend path that has held since late-2011.

A month ago, we acknowledged possible weather effects holding down February sales, but we argued that the main story was a “three steps forward, two (three?) steps backward” process, whereby the economy couldn’t maintain any momentum toward a faster growth path. Today’s data affirm that assessment. If the severe winter weather indeed held down sales in February, there was little or no “payback” of those effects in March alongside the spring thaw. There is more than just the weather underlying these data.

Within individual store types, both grocery and restaurant sales were especially soft, after restaurants had seen strong sales growth in the fall. Car sales reversed their February declines, but no more than that. Sales at apparel and department stores registered slight gains that failed to fully reverse declines in January and February. Sales at electronics and appliance stores dropped for the sixth straight month, while sales at furniture, books/sporting goods, and building materials stores were at best flat on net over the last four months.

The consumer isn’t dying, but neither has he perked up any recently.

Retail Sales Trends
Retail Sales Trends Chart
Source: Census Bureau. As of 31 Mar 15. “Control” retail sales is total sales less vehicle dealers, service stations and building material stores

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 40 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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