Flash Update
Retail Sales Annual Growth Nears Zero/ Newsletter Update
January retail sales were down a seasonally-adjusted 0.01% from December, with year-to-year growth plunging to 2.29% in January, from a weather-inflated 5.69% in December. Importantly, December CPI inflation was 2.54%, but that would drop to roughly 2.0% in January, if market expectations for January's seasonally-adjusted monthly CPI change of 0.1% are met. Even with 2.0% official January inflation, that takes annual real (inflation-adjusted) retail sales to under 0.3%, a level not usually seen outside of recession. Indeed, that would be the lowest level seen since annual contractions in the final stages (late 2002, early 2003) of the 2000 recession.
Yesterday, the seasonally-adjusted December trade deficit widened to $61.2 billion from a revised $58.1 billion in November. The deterioration was enough to offer some downside pressure on the next revision to fourth-quarter GDP growth.
In combination, these two reports will help dispel the notion that the economy is enjoying a sudden, miraculous rebound. Regardless of resulting market hype, the Fed's next move likely will be a tightening, not because of an overheating economy, but because of market abandonment of the heavily over-priced U.S. dollar.
Most upcoming economic reports should continue dampening the economic-recovery myth. Details will follow in the still-pending monthly newsletter.
Barring protracted loss of power from today's ice storm in the New York City area, the January/February newsletter will be published by next Tuesday. The latest missive will include significant new material and has been complicated in timing by unexpected travel and seasonal maladies.
Best wishes to all,
John
Walter J. "John" Williams
www.shadowstats.com
(908) 534-8223
January retail sales were down a seasonally-adjusted 0.01% from December, with year-to-year growth plunging to 2.29% in January, from a weather-inflated 5.69% in December. Importantly, December CPI inflation was 2.54%, but that would drop to roughly 2.0% in January, if market expectations for January's seasonally-adjusted monthly CPI change of 0.1% are met. Even with 2.0% official January inflation, that takes annual real (inflation-adjusted) retail sales to under 0.3%, a level not usually seen outside of recession. Indeed, that would be the lowest level seen since annual contractions in the final stages (late 2002, early 2003) of the 2000 recession.
Yesterday, the seasonally-adjusted December trade deficit widened to $61.2 billion from a revised $58.1 billion in November. The deterioration was enough to offer some downside pressure on the next revision to fourth-quarter GDP growth.
In combination, these two reports will help dispel the notion that the economy is enjoying a sudden, miraculous rebound. Regardless of resulting market hype, the Fed's next move likely will be a tightening, not because of an overheating economy, but because of market abandonment of the heavily over-priced U.S. dollar.
Most upcoming economic reports should continue dampening the economic-recovery myth. Details will follow in the still-pending monthly newsletter.
Barring protracted loss of power from today's ice storm in the New York City area, the January/February newsletter will be published by next Tuesday. The latest missive will include significant new material and has been complicated in timing by unexpected travel and seasonal maladies.
Best wishes to all,
John
Walter J. "John" Williams
www.shadowstats.com
(908) 534-8223