Reclaiming Common Sense

We are not in a Retail Ice Age - We are in a Retail Renaissance

The narrative in the mainstream media has been that we have been in a Retail Recession. Every month when the MARTS Retail report is released the "Retail Ice Age" is the topic du jour.  There has been discussions in the mainstream media (MSM) that retail sales have been sliding. The problem is that the MSM relies upon the analysis of the authors of the report and the seasonally adjusted data. This column has written numerous articles on the Retail Renaissance, and has provided the data that 2017 was the better than any other year on record, January was the best non-seasonally adjusted MARTS data for the month of January, ever, and February was the best February Retail data, ever. The data is pointing to the situation where this March will be the best March ever.  The data is also pointing toward the possibility that we will see month to month drops in sales in three sectors. That's to be expected. The month to month spike in sales, and the drop in same month sales for some sectors, is the reason that the data is seasonally adjusted.  Who would believe that some sectors could see growth of over 20% between February and March?

The only March where we did not see total growth over the prior March was during 2008 and 2009. The Great recession was a Housing Recession, A Retail Recession, A Jobs Recession, and a Government Spending Recession.We should see March to March growth in ten sectors. Electronics and Appliances might show another same month gain, as it did last month. Clothing and Accessories, as well as Sporting Goods and Hobby, should see a drop in sales from last March. If we see growth in these sectors then the potential for the first $6 trillion retail year will be that much closer to a reality. Watch the Motor Vehicle number, the Food and Drinking Places value, as well as Food and Beverage Stores data. We should also see a huge surge in Gasoline Station Retail sales.  Non-store retail sales should surge by more than 10% as sales for electronic, clothing, and hobby sales move from stores to the Internet.

Could Lower Taxes and Higher Wages, plus those "one time" bonuses, cause a spike of 15%-18% in month to month sales? Weekly earnings spiked by 2.17% to 6.27% between March 2017 and March 2018, on average, depending on sector. The Tax Cut and Jobs Act lowered taxes for everybody, based on the graduated tax structure our country uses. People are starting to receive bonuses and tax refund checks.  We recorded total February to March growth in excess of 15% last year. We have 3.4 million more people working full-time jobs and nearly 1 million more people working part-time jobs as of March 2018 compared to January 2017. More people working time higher wages equal more money to spend. We should see sales improve in all sectors compared to March 2017 this month.

We are in a retail renaissance. Sales are improving. More sales means that more companies may hire more people to  make more sales.  More sales means people can be paid more money. If people are paid more money they can buy more homes and boost real estate sales and retail sales.  Some sectors may see a drop from their sales last march because those items are being purchased on-line. We are just changing how we buy, not the quantity we buy. We may even be changing the quantity we buy because buying items on-line is easier and faster than driving store to store.

It's the economy.