Tags: retail | sales | economy | stock

Retail Sales Data Show Economy Remains Strong

By    |   Friday, 13 Mar 2015 08:25 AM

Retail sales fell 0.6 percent in February from January. This fact was featured in a number of headlines as if the news was unexpected. Retail sales actually fall in this report approximately 30 percent of the time.

Because economic data can change a great deal from month to month, economists often look at data on a year-over-year basis. Relative to February 2014, retail sales in February were up 1.7 percent. Digging deeper into the data, we can see that consumers are making more discretionary purchases, which is a bullish sign for the economy and the stock market.

Auto sales were up 6.2 percent from a year ago and furniture sales were up 5.8 percent. Consumers often defer purchases of big-ticket items when they are concerned about the economy. Increases in sales of items that are likely to be financed, like cars and furniture, indicate consumers are increasingly comfortable about their job security.

Another bullish note in the retail sales report was that restaurant sales were up 7.7 percent from last year. Restaurants represent a small luxury for many consumers. It is usually less expensive to cook at home, so purchases at restaurants show consumers are less concerned about day-to-day expenses and are willing to splurge more, again showing confidence in their job security.

The majority of the evidence continues to point to a strong economy and economic growth is usually bullish for stocks. Pullbacks in the stock market should continue to be viewed as buying opportunities until the economic data weakens.

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MichaelCarr
Retail sales fell 0.6 percent in February from January. This fact was featured in a number of headlines as if the news was unexpected. Retail sales actually fall in this report approximately 30 percent of the time.
retail, sales, economy, stock
251
2015-25-13
Friday, 13 Mar 2015 08:25 AM
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