Monday, April 14, 2008

Retail Sales Beat Estimates, Inventories Rise

- Advance Retail Sales for March rose .2% versus estimates of unch. and an upwardly revised .4% decline in February.

- Retail Sales Less Autos for March rose .1% versus estimates of a .1% gain and an upwardly revised .1% loss in February.

- Business Inventories for February rose .6% versus estimates of a .6% gain and a .9% gain in January.

BOTTOM LINE: Retail sales in the US rose in March, Bloomberg reported. Sales at auto parts stores and auto dealerships rose .2% versus a 1.2% decline in February. Weekly retail sales have been trending higher of late. Weekly retail sales have been rising on average 1.1% the last five weeks versus a .5% average gain the prior five weeks. I suspect retail sales have already seen their weakest levels for the year and will improve modestly as the effects of monetary/fiscal stimuli take hold and sentiment improves.

Inventories at US businesses in February rose, Bloomberg reported. Sales fell 1.1%. The amount of goods on hand at the current sales pace rose to 1.28 months’ worth. Stockpiles at general merchandise stores, which include dept. store, rose .2% and inventories at building materials retailers rose .4%. Inventory rebuilding in 1Q should help keep GDP around flat-to-mildly negative. I still expect GDP to rise modestly this quarter.

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