Retail Sales Surge 1.6% Wiping Out Dec and Feb Losses But Bond Yields Drop

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Retail sales rose 1.6% in March topping the most optimistic estimates.

Let's dive into the Census Bureau's Advance Report on Retail and Food Services for March for more details.

  • Advance estimates of U.S. retail and food services sales for March 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $514.1 billion, an increase of 1.6 percent from the previous month, and 3.6 percent above March 2018.
  • Motor vehicles and parts rose 3.1%. Sales excluding autos rose 1.2%
  • Gasoline sales rose 3.5% primarily due to rising gas prices. Sales excluding gasoline rose 1.4%
  • Department stores were flat.
  • Nonstore Retailers (think Amazon) sales were up 1.2%
  • Total sales for the January 2019 through March 2019 period were up 2.9 percent from the same period a year ago. The January 2019 to February 2019 percent change was unrevised from down 0.2 percent.
  • Retail trade sales were up 1.7 percent from February 2019, and 3.5 percent above last year.
  • Nonstore retailers were up 11.6 percent from March 2018, while sporting goods, hobby, musical instrument, and book stores were down 9.7 percent from last year.

Strong Report

This was a strong report.

Perhaps the government shutdown played a bigger role than analysts previously estimated.

Yet, the report is not consistent with yesterday's Beige Book report that shows Slight to Moderate Growth Across 12 Fed Regions.

Nor is the report consistent with Tuesday's report that Industrial Production Unexpectedly Declines.

Curious Bond Market Reaction

Today we have another curious bond market reaction.

On Tuesday Industrial Production report, I noted "Bond yields rose on this weakness. The 30-year long bond is at 2.994%, again flirting the the 3 percent level."

I asked: "Hot retail sales numbers coming up on Thursday?"

Yes, we did have a hot report.

Yet 30-year, 10-year, and 5-year treasury yields are all down 3.3 to 3.4 basis points to 2.96%, 2.56%, and 2.37%.

Inversions with the 3-month yield (down 1.7 basis points to 2.42%) widened.

Mike "Mish" Shedlock

Comments (8)
No. 1-5
RonJ
RonJ

"Retail sales rose 1.6% in March topping the most optimistic estimates."

Must have been the weather.

Whisper2018
Whisper2018

U.S. unemployment benefit claims drop to lowest level since 69 plus strong Sales are two strong indicators for the end of business cycle...

lol
lol

Soaring prices (stagflation),gas will hit $4 plus dollars a gal this summer thanks to relentless central bank money printing driving prices on everything through the roof,is economic collapse 2.0 finally here?if the fed whips out QE4 and slashes rates within the month answer is...……..yes!

Carl_R
Carl_R

I think Mish hit the nail on the head. The government shutdown slowed sales in December-January, no doubt, but in March there was a rebound. Now that's all behind us. Where do we go from here?

mark0f0
mark0f0

Canadian rail traffic is falling off a cliff.