Today the Commerce Department reported that retail sales in January rose 1%. This is the first increase in seven months and the biggest since November 2007. This sounds like great news after weekly reports of retailers cutting thousands of jobs amid dismal sales. Before the report was released at 8:30 am in Washington, economists predicted the worst. Bloomberg News surveyed 72 economists for their opinions on what to expect from the report. The general consensus was gloomy. Steven Rick, a senior economist at the Credit Union National Association was quoted saying, “Households are hunkering down. As people pull back on spending, that creates further unemployment. We’re in a feedback loop.”
However, everyone was presently surprised when the Commerce Department reported a jump. USA Today quoted Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J. “It is the sort of tonic that can sooth the market to an extent. We’ve been keying on things not necessarily getting better but at least deteriorating at a slower rate. And this builds that case.”
While it’s not time to bring in the band, this is an improvement over news of late. To put it in perspective, compared to January 2008, last month’s sales were down 9.7%. There’s still more work to be done.
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[...] Department, the decline came as a surprise to economists. This is the second time this year that economists were surprised at the retail sales report. What does that mean about the validity of these reports in this [...]