Takeaway: The reality is that things aren't as good, underneath the hood.

The Wall Street Journal Misses the Mark On Deteriorating Retail Sales - retail cartoon 05.13.2016

 According to the Wall Street Journal:

The Wall Street Journal Misses the Mark On Deteriorating Retail Sales - z wsj

 

We disagree.

This story misses the mark on a number of levels. That supposed "rebound" in retail sales was on the headline number, +0.6% month-over-month. Auto sales were a major contributor to the uptick, +5% on a month-over-month basis. 

This only scratches the surface. What investors need to watch is the so-called "Control Group" within retail sales. This is the *all-important data set* that is a proxy for what's input into GDP. On that score, the data was decidedly bad.

  • The Retail Sales "control group" came in at +3% y-o-y, down from the peak of nearly 5% in 2015.
  • Meanwhile, the annualized quarterly average was remarkably slow, at +0.3%, down from 6.8% in the second quarter.

This amounts to a sizeable decline in a large GDP contributing data point. In other words... 

There's no "rebound" to be found.

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The Wall Street Journal Misses the Mark On Deteriorating Retail Sales - retail sales 10 14