The Market Vectors Retail (RTH) is an ETF that tracks the performance of 25 of the largest U.S. listed publicly traded retail companies, which include Wal-Mart Stores (WMT) and Target Corporation (TGT). As you can see in the price chart below, the ETF was strong throughout the holidays, but began to drop after dismal same-store sales reports were announced in February.(click to enlarge)
RTH data by YCharts
RTH rebounded in March, but then began to decline in April as March same-store sales reports continue to show same-store sales declines. Why? Easter.
Easter is a big holiday for most retailers. In fact, it's the first major holiday in the year after St. Patrick's Day, but St. Patrick's Day is the same day every year, whereas Easter is a roving holiday. The Council of Nicaea (A.D. 325) decided that Easter would be the Sunday following the full
In real, population-adjusted terms, Retail Sales are now at the level we first reached ten years ago in March 2004.
Yesterday the Advance Retail Sales Report showed that sales in March rose 1.1% month-over-month and 3.8% year-over-year, as I reported in my real-time update.
With today's release of the Consumer Price Index, we can now dig a bit deeper into the "real" data, adjusted for inflation and against the backdrop of our growing population.
The first chart shows the complete series from 1992, when the U.S. Census Bureau began tracking the data in its current format. I've highlighted recessions and the approximate range of two major economic episodes.
The Tech Crash that began in the spring of 2000 had relatively little impact on consumption. The Financial Crisis of 2008 has had a major impact. After the cliff-dive of the Great Recession, the recovery in retail sales has taken
Retail sales increased sharply in March, rising 1.1%, the best monthly gain in well over a year. The news brings another clue for thinking that the recent economic slowdown was a temporary affair related to the weather. Indeed, today's report also revived the year-over-year trend in retail spending. For the moment, March is shaping up as a positive turning point of significance for the big-picture state of US macro.
As the first chart shows, the winter blues are fading fast as it relates to consumer spending. In fact, the numbers look even more impressive when we strip out gasoline sales, the pernicious slice of retail that's typically unproductive as it relates to economic growth.
(click to enlarge)
More importantly, retail spending has reversed course in a meaningful way on a year-over-year basis. Sales advanced 3.8% for the year through March. That's a dramatic improvement over February's meager 1.8% gain.