BY: MARSHALL BARTLETT
Senior Vice President / Portfolio Manager
Announced this morning, Retail Sales for August increased 0.6%, less than expected. Strength occurred in food service & drinking places as well as clothing businesses, while stores for sporting goods, hobby, musical instrument & books were weak. Non-store retailers (online shopping) were flat from the previous month. The Control Group, which excludes sales for food, autos, building materials, and gas stations, decreased -0.1% in August, also less than estimates. Overall, a relatively weak report in August, when we normally see an increase in spending for back to school items. However, the large increases in Retail Sales in previous months as well as the fading effects of the fiscal stimulus programs impacted this period. With an economy continuing to slowly reopen and an accommodative Federal Reserve, consumer spending will be watched closely in the months ahead given it is close to 70% of GDP. In all, bond yields ticked lower following the report and equity futures are higher heading into the market open.
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