Money Minute: Don’t be misled by retail-sales stats [Video]
Consumers account for about two-thirds of U.S. economic activity, so it’s always cool when we’re out, you know, consuming. And the latest government figures show we’re doing more of that.
Retail sales jumped a healthy 1.1% last month, nearly double January’s 0.6% advance, according to the Commerce Department. That’s the good news.
The not-so-good news is that a big chunk of that spending was at the pump as gas prices continued marching northward. Take away gas purchases from the equation, and retail sales were up only 0.8%.
Still, the suggestion of steady improvement was good enough for Wall Street. Stocks and bond yields climbed on the Commerce Department report, with traders latching on to the fact that sales were up in 11 of 13 categories.
For instance, car sales accelerated to the fastest pace in four years, led by Chrysler and General Motors. Purchases at clothing stores rose 1.8%, the most since November 2010.
Furniture and general merchandise stores were the only categories to show a decrease in demand. Presumably that means we’re fairly satisfied with our current couches and furnishings.
Will the gravy train keep rolling? That’s the big question. But anyone holding out hope for a speedy economic recovery should keep in mind that the stats are skewed by those sky-high gas prices.
And as we pump more moola into the tank, that’ll leave less for, well, everything else.
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