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US Retail Sales Show Strength

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US Retail Sales Show Strength

The key US Retail Sales data for the month of March has just been released by the US Census Bureau. Consumer purchases have grown by 1.1% on the month of February, this compares to an increase of 0.3% the previous month and a market consensus estimate of 0.8%. Stripping out the large automobile component from this data produces a monthly growth in Retail Sales of 0.7% compared to February’s 0.3%, economists estimates were for a 0.5% increase this month.

Strong growth, as again evidenced by the continued expansion in Retail Sales, was the back drop to the International Monetary Fund (IMF) conference held in Washington over the weekend. The US, along with Britain and Canada, was hailed as a star performer of this fledgling economic recovery. Economists and commentators from around the globe have been reiterating that most developed economies can expect 2.5% to 3.5% growth over the course of 2014 and again in 2015. It was however widely agreed at the conference that unless steps are taken these growth rates will not permeate to all sectors of their various economies. To the agreement of many, former US Treasury Secretary, Larry Summers, used the phrase “secular stagnation” to describe the asymmetrical nature of the current economic recovery, he was referring of course to the US economy but in the current environment he could have been describing the status of any one of the developed nations.

This however proved to be the limit of agreement among the various participants at the economic conference. IMF chief, Christine Lagarde, for example believes that the solution to balancing out growth is to further stimulate the supply side of the relevant economies, to achieve this she stated would take a large increase in government investments in infrastructural and other capital projects. This was at odds with the British Chancellor, George Osbourne, who was promoting the austerity status quo as a means to recovery. Detrimental to the IMF chief’s message is that under the guidance of Osborne Britain has become the fastest growing developed economy in the world. It is however worth noting that despite it’s outward success, Britain’s recovery is one of the most unbalanced of all developed nations.

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