Today’s retail number–off the consensus by a hair–nonetheless moved markets, with the long bond up 1 17/32, and the dollar off by a big figure against the Euro. Worse than the miss on retail sales (+.9% in March vs. a consensus forecast of +1.1%) was the revision of the prior month to -.5%, to be sure.


Year-on-year, total retail and food service sales have grown by only 1%, the lowest level since the such-as-it-as recovery began. With CPI flat year on year, this represents real growth in retail sales of just 1%, a miserable result.

If we deduct gasoline station sales from the total, the number is only slightly less depression.


What matters is the total real volume of retail purchases. The number is not just miserable: it is an 80-decibel cognitive dissonance for the mainstream model, which predicted with blithe confidence that lower oil prices would stimulate consumer spending. Exactly the opposite has happened. The growth rate of consumer spending ex-gasoline has fallen since oil prices began collapsing, from the 5%-7% range of YOY increase to less than 4%. It is not just that what was supposed to happen, didn’t. The precise opposite happened. All the tweaked and tailored models of consumer behavior pointed in the wrong direction.

It turns out that the three-month flurry of McJob creation from December to February failed to raise the confidence of American households. We doubt that 2015 GDP growth will reach the 2% mark. The poor employment print in March is probably the harbinger of many.

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