Jack Dunn - Reclaiming Common Sense

The April Monthly and Annual Retail Trade Summary (MARTS) will be released next week. This report is almost as important as the monthly employment situation report. If we have more jobs, more full-time jobs, and we do, than we had last year, and if wages are rising, and they are, then we should have more money to spend. The discussion in the media has been that we are in a Retail Ice Age. The problem is that he media is confusing retail store closings with retail sales. The Great Recession was actually a combinations of recessions: A housing recession, a jobs recession, a retail recession, a revenue recession, and a GDP recession. The problem is that a number of analysts are examining the seasonally adjusted (SA) MARTS data instead of the non-seasonally adjusted data. Another problem is that some analysts are focusing only on the advance values and not the preliminary or final MARTS numbers. We have seen record MARTS sales for 2017, and the best ever January, February, and March MARTS data, non-seasonally adjusted, ever, for total sales. We have had a record first quarter except you would not know it based on the reporting. There are a number of ways to examine the data: Month to month growth, April to April Growth, Current Year Growth, and Rolling Year Growth.

The Rolling Year data tells us where we have been. If you look at the past twelve months we are up 4.82% March 2017 through March 2018.  The April 2017 value was 4.19%. April of 2016 we were at 3.53%. April of 2015 we were at 2.37%. We are seeing annual growth rates rise, in general, after seeing declines in retail growth from April 2012 through April 2015, April only. Last April we were at 5.817 trillion dollars. We were at 5.563 trillion during April 2016. This would place this month's rolling year value at 6.097 trillion dollars. If this number edges up to 5%  then we could see rolling year value of 6.1 trillion dollars.

The current Year data points to where we may be heading. The Current Year data is ahead of where we were during any prior year.Last year we saw a total retail sales year of 5.753 trillion dollars. We had 1.328 trillion dollars in sales January through March of 2017. This year we saw 1.392 trillion in sales before the final February and March data has been released. That is a 4.8% increase in annual sales. If we just grow at this rate then we will eclipse the $6 trillion mark by the end of the year. The value would be roughly 6.03 trillion dollars.

April to April: All Sectors should rise except Electronics and Appliances and Sporting Goods/Hobby. We should see a pop in BMGE, Food and Beverage Stores, Gasoline Stations, Non-store retail, and General Merchandise.  Electronics and Appliance (E/A), and Sporting Goods, Hobbies, Book  and Music (SGHBM,) may falter this month. These are prime "non-store retail (NSR)" items, as are clothing and Clothing Accessories. The drivers for the month, pun intended, are Motor Vehicles Sales and Parts, Food and Beverage Places, Food and Beverage Stores, General Merchandise, NSR, and Gasoline.

Month to Month Sales should improve for Building Material Store (BMGE) and Gasoline Stations. Yes, we are paying more at the pump. There was a gasoline sales recession. We aren't spending as much as we were during April 2008, 2010, 2011, 2012, 2013, or 2014, so far. Expect this number to eclipse 40 billion dollars. We should see month to month growth in BMGE because "Spring has Sprung" and people are getting their homes ready for sale.

Expect good retail news to to be recorded. Anticipate the news to report it as weak or non-exciting. Will anybody else comment on the possible record setting, $6 Trillion retail economy?

It's the economy.