Economic Forecasts

March Retail Forecast: Firing on All Cylinders

March Retail Sales will grow in all sectors Month to Month and March to March. Seasonally Adjusted Sales should grow in all sectors, too.

March Retail Sales culd see a non-seasonally adjusted annual growth rate Better than last month and last March, or slightly slower. Expect 4.50% to 4.75% growth.

The mainstream media spent considerable time talking about weak December Retail Sales even though we had our best ever  December and our best ever retail sales year. We had another record January and another record February. There was some weakness, possibly due to the Government Shutdown, as household dependent sales in Home Building and Garden sales and Household Furnishings, and Electronics and Appliances showed weakness during January and February.  This month all sectors should be firing on all cylinders.

Need to reassess the past reports. The headlines were that November retail sales rocked and the December Retail sales did not match expectations. This column published two articles regarding the December Retail Report. We had our first $6 trillion dollar sales year.  The January Retail report revealed a record January. The February Retail report. The February Retail Report was also reported as being weak, even though it was the best February on record.

Expect non-seasonally adjusted growth month to month and March to March in all sectors. All sectors should increase month to month, especially Building Materials and Garden Equipment (BMGE,) Sporting Goods, Hobbies, Books, and Music (SGHBM,)  Motor Vehicles and Parts (MVP,) and  Clothing and Clothing Accessories (CAC.)  The March to March growth is expected to be the largest in Gas Station Sales (GASS,) CAC, Non-store Retail (NSR,) Food and Beverage Stores (FBS,) and Furniture and Household Furnishings (FHF.) The annual rate of growth had been growing March to March from 2.78% to 3.02% to 4.67%. It was proposed that we could stay above 5% annually for this entire year., prior to the shutdown. Expect and annual rate between 4.50% and 4.75%

Seasonally adjusted retail sales should exceed last march's 4.65% and february's 4.59% annual rates of growth.

Expect all sectors to grow seasonally adjusted month to month, seasonally adjusted, except one. All sectors should grow seasonally adjusted. All sectors except non-store retail and General Merchandise can drop month to month while the others rise. The largest growth should be reported in MVP, Health and Personal Care (HC,) NSR, and  Food and Drinking Places (FDP,) The two sectors to pay close attention are Electronics and Appliances  and FHF. These are real estate sensitive sectors.  Which sector will be the sector that sees a seasonally adjusted decline in sales month to month? Time will tell. The month to month growth rate could be 0.40% to 1.70%. Expect something in the 0.75% to 1.00% range. There may be pent up demand that boosts this to the high side, well over 1.00%

Expect all sectors to grow seasonally adjusted March to March. The largest growth should be reported in NSR, GASS, MVP, FHF, FBS, and BMGE. The annual rate of sales last year was 4.65% annually and 5.09% for March 2019 compared to March 2018. We have seen rolling year growth (the sales during the past twelve months,) decline since August.  We were still growing faster than we had from 2013 through 2017. Expect annual growth between 4.50% and 4.75% here as we saw in the NSA data.

The data is the data. Normally we see strong growth in housing related retail sectors during the Spring. We are still on-track for a better retail sales year than last year’s record sales year. There was a peak in growth during August of 2018. We saw faster growth coming out of the Great Recession, peaking at over 7% during 2012. We have seen 6% to 8% annual growth during 1999 and 2000 and during 2005 and 2006. This month could be a turning point or it could be one were we continue to see a slowing rate of annual growth.  A sustained rate of 4.00 to 4.50% would probably be well received. Slowing can still be growing.

It’s the Economy.

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