Market Commentary

Retail Sales

The late retail sales report for December was released yesterday. It showed a strikingly weak number falling 1.2%, and if you take out autos it fell 1.8%. Those are the worst numbers in nine years. Gasoline sales fell hard too, but mostly because the price at the pump fell in December. However, internet sales shrank 3.9% so the retail sales number was weak overall.

Of course the stock market falling hard in December may have had something to do with it. What this weak number will mean is that the fourth quarter GDP number will be below 3%, and it may mean year-over-year of GDP growth will be below 3% continuing the long string of below annual 3% growth since the last recession.

I wonder if the Fed saw these numbers in January though they were delayed. If memory serves, and it does in this instance, the Fed changed from being hawkish on raising interest rates in their last meeting in December to dovish with ‘they will be patient’ in January. Do you think they got the numbers first? I certainly do.

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