March retail sales hit a two-year high.
Transcript Below:
ED YARDENI: Well, the retail sales report that came out for March was in line with our expectations. We were expecting a strong number for March. We didn’t expect to see that be a strong upward revision in February as well. But we attributed a lot of the weakness in January and even in February to the weather. And so we were expecting, you know, in the spring there would be growth. There was. So the consumer is still spending some of that strength is related to people scrambling to by cars before the tariffs lead to higher car prices, and that may continue for another couple of months. And then the risk is things will slow down on the consumer side.
Well, I think despite the weakness in consumer sentiment, you know, when you ask consumers how they feel about things, they tell you they’re pretty depressed. They’re worried about the tariffs having an impact on rising prices. They’re worrying that they might lose their jobs. So they’ve got a lot of worries. And yet, despite all that, retail sales in March was very strong. And they’re spending a kind of well, they’re definitely spending on autos trying to get ahead of price increases and autos, but they’re also spending on health care. They’re spending a lot on services, on health care services. They’re still traveling more so overseas than domestically. They’re definitely spending on health care. And that industry is continuing to grow. I think that we’re seeing some slowdown maybe in leisure and hospitality. Hotels and motels in the United States, maybe not in foreign travel. But of course, what we want is we want consumers to spend more in the US. So there could be some slowdown overall in consumer spending as, as we get into the summer, into the fall. But again, much will depend on the course of tariff negotiations.
Well, you know, over the past three years, there was a lot of talk that consumers were going to retrench because the Federal Reserve was raising interest rates, and that really didn’t happen. The consumers actually remained remarkably resilient. Of course, the consumers are very dependent on the job market. And the job market remained remarkably resilient. That’s partly because there’s actually a shortage of workers in the United States, especially skilled workers, and especially now that we’ve got a closed border. And as a result of that, consumers have jobs. They’re not losing them at this point. And I think they as long as the job market stays relatively robust, I think the consumers will spend even if they’re not feeling particularly happy about things.
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