Americans heartened by an improving job market flocked to shopping malls and auto showrooms in March, raising the odds of a durable economic recovery.Retail sales increased 1.6 percent last month, more than anticipated and the biggest gain in four months, according to figures from the Commerce Department issued today in Washington. Another report showed consumer prices rose 0.1 percent.
Stocks climbed for a fifth day after the reports signaled the expansion is broadening without stoking inflation, and results at JPMorgan Chase & Co. and Intel Corp. beat estimates. Federal Reserve Chairman Ben S. Bernanke told lawmakers today the world’s largest economy still faces “significant restraints,” indicating policy makers will keep interest rates low in coming months.
“What we’re seeing now is the consumer take part in the recovery,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “The Fed’s not taking the punch bowl away quite yet,” because inflation is “very tame,” he said.
In testimony before the Joint Economic Committee of Congress, Bernanke said recent data indicated a “moderate economic recovery in coming quarters,” while weak construction and still-high unemployment remained impediments to faster growth.
The complete report is here. There are some really good numbers, such as
Auto sales up 6.7%
Furniture/home furnishings: +1.5%
Building materials up 3.1%
Clothing up 2.3%
The one bid negative was electronic/appliance stores which were down 1.3%.
But, this was a very good report.
1 comment:
About the retail sales, small retailers don't take part in the survey so mostly larger chain store are included. This makes the numbers look better than they are because tens of thousands of small stores across the nation have closed and their old customers now go to the bigger chain retailers.
Second, tax refunds were running $13 billion higher this year than last as of a week or two ago. This has resulted in an increase in consumer spending obviously.
Third, the stimulus has resulted in $73 billion in tax relief and income support in 2010:Q1 directly raised household spending by $47 billion, according to estimates. Transfer payments are currently making up over 20% of personal income, whereas in the 2003-early 2008 boom it made up a little over 12%.
Four, Toyota had a huge incentive program during and after the acceleration publicity, and the domestic auto makers matched that cut throat program.
Five, interest rates in March were still far below normal levels because of Fed printing. That printing is over now.
With the tax refunds spent, the stimulus dwindling, the auto incentives ending, and the fed printing over, a big question market remains for the future.
You show a graph about companies hiring when margins and profits expand, but that may be misleading. What's far more important is companies expectations of future margins and profits, and that remains a big question mark for many reasons (withdrawal of govt support, withdrawal of Fed support, new regulation, higher taxes, health care requirements, cap and trade, etc).
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