Steve Blitz Morning Notes

The consumer is back but only for holidays, birthdays and anniversaries. Yes, the April data are a payback for the boost to March from the early Easter but to end the analysis there is to understate how much more careful consumers are about spending their money. Control retail sales (sales less autos, gasoline, and building materials) were down -0.25% against a 0.66% raise in March. Spending on purely discretionary items were also down -0.26% in April. With more hiring and fewer layoffs, consumption is set to grow but not drive the economy. If it does do the driving, it would mean lower savings and that ensuing romp through the mall will end up being short-lived. Recent downside volatility in the equity market should, if anything, reinforce the notion that try as consumers might to convince themselves otherwise, the outcome of this recovery and the recovery of their portfolios are not yet assured. Read more -- Majestic Research