U.S. Economic Statistics: Retail Sales, Industrial Production

The outlook for the U.S. stock market’s impact on the economy is that

inflation → inflation containment measures = monetary tightening → economic slowdown

However, going forward, the key points are ① what will happen to inflation, ② how far will the tightening go, and ③ how deep will the economic slowdown be.

The stock market views the point as whether real GDP growth can continue at about 1.5% or more (an ISM index around 52); if so, it believes the upward trend in stock prices will continue.

Using the recently released retail sales and industrial production to estimate real GDP growth, it is 5.4% as of January. There is a view that growth could continue surprisingly mạnh due to wages and other factors, stronger than the previous month.

What surprised the market in January data was that retail sales jumped sharply month over month.

So far, the growth in retail sales has been driven by measures taken against COVID-19, such as cash transfers to households and extended unemployment benefits. But those are no longer in place. Nevertheless, if the growth in retail sales is being sustained, economic growth may be solid.

There are some in the market who see it that way, but I believe that ①seasonal adjustment irregularities and ②a shift from services to goods in consumer spending mean that retail sales do not necessarily reflect overall consumer spending, and that the slowdown in personal consumption continues.

U.S. retail sales include the monthly sales of department stores and supermarkets within the United States,outlays for dining outand do not include service expenditures such as education, medical care, travel, and lodging.

As shown in the next graph, overall personal consumption does not grow as much as retail sales. January’s personal consumption statistics data have not yet been released. It is worth watching.