Wednesday, March 12, 2008
SpendingPulse on Feb Sales
Retail sales tumbled 1.1 percent last month, compared with a 0.2 percent gain in January, said SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide (MA.N). The report excludes auto sales.Although there are signs that the production side of the economy is picking up, the gas prices will overwhelm that effect for a while. This is a very significant reading, and it is very consistent with other data. The consumer side of the economy is slowing significantly.
In February, consumers cut back on nearly all types of items. Even the few bright retail areas which had posted solid gains such as gasoline, groceries and electronics faltered, according to SpendingPulse.
That said, I hope for a lot of foreign investment and companies not only because of the economics, but because they will have a different world view than the US companies they replace.
I do believe that in some sectors relative world oversupply of production exists. For example, I strongly expect that pharmaceutical plants in some Asian countries are overbuilt.
So much of our manufacturing base has been lost that we are most likely to be reinvesting in basic commodity production and parts supply for various high end manufacturing.
Links to this post: