Retail, Baby - Aside from consumer sentiment, another great metric that indicates the health of the average American is retail numbers.
Yesterday, retail sales and something of a core retail data, excluding vehicle sales, were released.
The numbers were decent. We expected a 1% increase since last month, but we only saw a 0.9% increase. Not a huge deal on the miss.
When compared to expectations, these numbers are pretty good, and when you compare the revisions from the last round of numbers, retail still looks strong.
Even though retail is moving higher, these numbers are well below their highest levels.
The consumer appears to be strong now, but how much longer can they keep spending with inflation at these levels and rising rates?
These numbers show us that economic growth is subtly slowing and that the risk of a recession exists.
The interesting thing about these numbers is that even with super-strong retail expansion in the last quarter, we saw a GDP contraction. With a slowdown in growth, it would appear to the uninitiated that another contraction and, technically, a recession will result.
That being said, there's still a chance that the economy can grow this quarter, even if only slightly.
Ask me about it again in about 8 weeks.