Where’s the Strong Consumer? Retail Sales Miss – Again!

Sorry, CNBC, lower gas prices do not equal more spending.

Bullion.Directory precious metals analysis 12 February, 2015
By Christopher Lemieux
Senior Analyst at Bullion.Directory; Senior FX and Commodities Analyst at FX Analytics

US retail sales disappoint once again, but do not tell the S&P 500 that is up 10 points in the pre-market. Retail sales collapse further, contracting .8 percent. This was higher than the .5 percent decline expected by economists. 

Retail sales ex-gas and autos came in with a modest .2 percent gain, which further expresses the lack of demand for gas. Core retail sales fell .9 percent. This was the worst print since November 2010.

Unemployment claims were disappointing, too. Initial jobless claims came in at 304,000, higher than the general consensus at 285,000. Last month’s jobless gains were modestly revised higher. A large part of the layoffs are being seen out of the energy sector, as crude prices hover around $50 per barrel.

The reason this could become troubling is that 15 percent of the jobs gained since the recession were created during the shale boom. Lower oil prices will continue to press oil companies and the result could become quite damaging to the economy. The shale boom could absolutely end up like the commodity bust seen in Australia over the last two years.

The personal savings rate rebounds after the holidays:

There has now been back-to-back disappointments in consumer spending for the first time since 2012. It also comes at a time when every talking head said lower gas prices would boost spending and the “consumer is strong.” I wonder what data they’re looking at.

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