Perhaps Just One Word Absent From The Historic Consumer Splurge

Enormous. Terrific. Unbelievable. Biggest ever. The superlatives for US consumer spending during the month of March 2021 are appropriate, and for once they aren’t caused by some artifact of arithmetic or some other trick. While there are absolutely some base effects within the numbers, these levels of retail sales are far and away more than those.

It’s so ridiculous that there’s really little purpose in producing charts since all the estimates one after another just print way, way off them.

Headline, total retail sales smashed upward by 30% year-over-year (not adjusted), only some of which, again, are due to the low comparison by way of March 2020 in decline. The latest figure is a historic 21.8% better than retail spending in March 2019.

And so it continues: ex autos, up 21.0% year-over-year; retail trade +29.9%; retail auto sales (which did have a much higher base effect) +79.8%; etc. About the only category which didn’t register an unusually huge increase was, interestingly, of the online variety. But Amazon and its tiny competition weren’t exactly hurting since non-store retail sales managed another 30% annual increase, it’s just that since COVID those have become common.

Seasonally adjusted, retail sales were almost 10% higher in March than they had been in (upward revised) February. Not too long ago, to end 2020, consumer spending was barely able to manage a 2% or 3% annual increase. In the latest month, just shy of double-digits in a single one. Not only that, showing just how much of a gain other than base effects, going back to that low set in December 2020 retail sales are up a massive 15% (which works out to an annual rate of 75%).

With Americans seemingly buying everything there is available to be bought, why aren’t markets buying the surge in spending? And in this case, I don’t just mean the bond market, I more so refer to the real economy marketplace which is what bond market prices are discounting to reflect.


The same day the Census Bureau reports these unqualified smashing retail sales figures, the Federal Reserve comes out with Industrial Production at the other end of the spectrum. Disappointing is to put it mildly; after a February filled with Texas cold weather and therefore electricity-starved manufacturing, March was supposed to have been – along with producers greedily eyeing the consumer bonanza – more than a dead-cat bounce.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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