Retail Sales Decline Month-Over-Month; January's Retail Sales Revised Downward, But Overall Things Are Great -- Bloomberg -- March 16, 2016

Updates

March 18, 2016: reflecting on the retail sales report posted below, it was interesting to look at the Bloomberg chart when the pathetic January retail sales came out. That's a pretty dismal graph.  
 

Original Post

 

This must have been a gut-check for the Bloomberg editors. One of the mouthpieces for the Obama administration had no way of spinning this story. Not only did retail sales drop month-over-month, but retail sales in the previous month (January) were revised downward. And February, this year, had an extra shopping day -- that extra shopping day was one reason analysts said car sales were so good in February.

From BloombergBusiness:

U.S. retail sales dropped in February and the prior month’s gain was revised to a decline, calling into question the narrative that bigger gains in consumer spending would propel economic growth at the start of 2016.

The 0.1 percent decline in purchases followed a revised 0.4 percent January decrease, Commerce Department figures showed Tuesday. Sales excluding gasoline rose 0.2 percent in February, reversing the previous month’s retreat.

The decrease in purchases, which included auto dealers, department stores and furniture outlets, showed Americans were salting away money saved at the gas pump amid volatile financial markets. The disappointing reading on the biggest part of the economy comes as Federal Reserve officials meet to gauge whether growth is strong enough to eventually warrant another increase in interest rates.

We've gone through this a million times. The savings on gasoline amounts to a couple of McDonald's dinners for a family of four each month.

The bigger expense? Affecting everyone? ObamaCare.

The 800-pound gorilla is not mentioned in this article by name, but at least it is mentioned in passing:
“We’re seeing higher rents, higher healthcare expenses, so that may be offsetting a lot of the benefit of lower gasoline prices,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. “You’re still looking at strong job growth, good wage growth, and wages should continue to pick up as the labor market tightens.”

The writers mention that payrolls (the number of people working) but it does not mention that the number of hours in the average work week has declined under this administration. The average workweek is now slightly less than 35 hours -- driven by ObamaCare which mandates that full-time employees -- defined as working 35 hours -- must be provided health care insurance by their employer. In addition, wages -- despite all the talk of raising minimum wages -- have stagnated.

This link:

• average hours/workweek: 34.4 hours
• average wages: declined by 3 cents/hour in February, 2016

Less hours/week and less money per hour = less money overall.

I wonder how this will affect GDP forecast (GDPNow)? The most recent forecast was March 9, 2016, which has been posted. I assume GDPNow will update the forecast with these retail sales being announced today.