ACTV - January Retail Sales Collapse - The First Sign Of A Recession?

2024-02-16 03:36:12 ET

Summary

• January retail sales unexpectedly decreased by 0.8% from December 2023, potentially signaling an economic slowdown or recession.
• Interest rate-sensitive cyclical sectors, such as building materials and furniture, are down year-over-year, suggesting the effects of monetary policy tightening.
• While the labor market remains tight, the weak retail sales report raises concerns about a forthcoming recession and the ability of the Fed to prevent it.

First signs of a recession?

Retail sales for January 2024 surprisingly decreased by 0.8% from December 2023. This is even more surprising given that the January labor market report showed a surprisingly strong labor market, with the unemployment rate dipping to 3.7% with 355K new jobs created. In addition, the January CPI report showed a 0.4% increase in core inflation, which also paints a strong economy, and should have translated into strong retail sales given that retail sales are not adjusted for inflation....

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