The optimists among you can look to retail sales for confirmation bias of any “V-shaped” narrative you might be harboring.
Coming off the largest MoM gain in recorded history, retail sales again came in hot, rising 7.5% in June, easily besting estimates for a 5% gain. May’s record rise was revised higher to 18.2%.
The ex-autos print was also a strong beat, rising 7.3%, while the control group rose 5.6% last month.
This is one place where the “V-shaped” recovery has, indeed, materialized.
Although MoM bounces appear as a “V” for many data points, absolute levels have generally failed to regain all of the ground lost to the pandemic. For retail sales, the situation is different. As difficult as this might be to wrap your head around, we are indeed back to almost unchanged.
I suppose this isn’t all that surprising. We are, after all, talking about a nation of consumption-addicted, instant gratifiers.
This throws a bit of cold water on the notion that nobody spent their stimulus payments. You could pretty easily argue that those who could spend it, did, and those who couldn’t, saved. The result: a rebound in retail sales and a concurrent spike in the savings rate.
Of course, if new lockdowns precipitate another wave of job losses and Congress fails to pass a large enough virus relief bill, you can kiss this rebound goodbye.
As the president would say, “We’ll see what happens”.
