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Retail sales bounced back like a rubber band because of stimulus (Trump checks, PPP, UE bonus). It’s all over in a few weeks & with the new uptick we likely see at least 6 more weeks of contraction with no plug. The real hit starts now
Moreover the recovery in retail aggregate masks over the huge dispersion between online/offline as well as high vs low touch sectors. Many never saw a bounce and online has permanently sucked up market share, further crippling businesses
Lastly, while retail sales saw a nice rebound, industrial production landed with a thud and has yet to show signs of life. Housing may help a little but the lagged impact of lower incomes and continued UE will likely cut into any rebound (& lower rates) in the coming months
All this points to more juice from DC but that will require all sides to play nice 6 months before an election. Things were dire in March and they were able to set partisanship aside. Less clear what happens now. Fed can work to keep spreads low, but can’t prop up cash flows...
People were too pessimistic...
But this is as good as it gets for now.
Expectations have now been reset higher just as the cash runs out and the reopening rebound fades.
But this is as good as it gets for now.
Expectations have now been reset higher just as the cash runs out and the reopening rebound fades.
