Economists and others weigh in on the April retail sales.
» We now have to expect flat consumption in April, which means there has been no net increase since January. In short, there is no momentum in spending; the freefall is over but shredded balance sheets and declining incomes mean a broadly flat trend is about the best we can expect. Greens shoots withering… –Ian Shepherdson, High Frequency Economics
» We do not view the 2.2% annual rate of increase in consumer spending recorded in the first quarter GDP accounts as the beginning of a recovery in consumption, but rather as a temporary bounce after two quarters of absolutely abysmal results. A resumption of moderate declines is the most likely scenario in the months ahead. The inescapable fact is that the U.S. consumer is faced with daunting fundamentals. Wage and salary income growth has evaporated, credit is very tight, home prices continue to decline, financial asset values have been decimated, and household balance sheets are generally a wreck. –Joshua Shapiro, MFR Inc.
» After encouraging back-to-back sales gains in the first two months of the year, retailers have encountered disheartening bumps on the road to recovery… Overall, these data suggest consumers could not sustain the modest first quarter gains in spending and at least one “green shoot” appears to be wilting. –Nomura Global Economics
» This would deal a considerable blow to the green shoots talk and it’s possible that would hit some of the recent optimism in the markets and hurt risk appetite. – Robert Blake, senior currency strategist at State Street Global Markets in Boston.
emphasis added
Dow down 170+ points, lots of red on the screens.
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