IYY - Retail Sales Data Suggests A Strong Consumer Or Does It

2024-04-27 23:11:00 ET

Summary

• The latest retail sales data suggests a robust consumer, leading economists to become even more optimistic about more robust economic growth this year.
• Retail sales data was extraordinarily weak from October to January, the traditionally strongest shopping months of the year.
• I suggest that relying heavily on one month’s retail sales data to claim the economy avoided a recession is not likely ideal.
• Our advice is to remain cautious about economic exuberance.

The latest retail sales data suggests a robust consumer, leading economists to become even more optimistic about more robust economic growth this year. To wit:

“It has been two years since forecasters felt this good about the economic outlook. In the latest quarterly survey by The Wall Street Journal, business and academic economists lowered the chances of a recession within the next year to 29% from 39% in the January survey. That was the lowest probability since April 2022, when the chances of a recession were set at 28%.

Economists don’t think the economy will get even close to a recession. In January, they, on average, forecast sub-1% growth in each of the first three quarters of this year. Now, they expect growth to bottom out this year at an inflation-adjusted 1.4% in the third quarter.” – WSJ

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