Wednesday, February 15, 2012

The Devil's in the Data

The latest retail sales report should come as no surprise to anyone - despite the rosier picture painted by Washington, few appear to be buying it. Nor, it seems, are they buying much of anything. Instead, buyers are voting with their feet, and the results aren't pretty.

Things like building materials, autos and furniture were hardest hit, dropping to barely a tenth of their combined December levels. Some try to suggest that retails sales are up, if you subtract gas, autos and building materials - which seems to be a crazy way of looking at it. After all, gas prices have risen steadily for several months, and most of America drives daily. Subtracting gas prices from overall retail sales is hardly representative of any economy, healthy or not.

Food sales shot up to the highest level in months. But it may not mean necessarily that people are buying more. Rather, a more reasonable explanation could be that prices are higher, as nearly anyone who enters a grocery store - even Costco and Sam's Club - will attest.

What the data signals is that we're still slogging our way out of this recession, and will be doing so for the foreseeable future. Until people get back to work, don't expect much to change.

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