Retail Sales Drop Could Be More Than a Blip
Investors were eager to brush off a bad report, but there may be some signal under all the seasonal noise.
Holiday sales rose less than expected.
Photographer: David Paul Morris/Bloomberg
At first glance, it was easy to brush off the lousy US retail sales report on Wednesday: After all, the numbers had been deceivingly weak in the previous two Decembers only to roar back in the following months. But by late morning, traders had stopped making excuses and stocks were on the retreat. The second interpretation may well be the right one.
The question, of course, is whether the numbers are a head fake to be safely disregarded, a healthy cool-down or the start of a broader collapse. Cooling could presage a welcome pause in the Federal Reserve’s onslaught of higher interest rates, while the latter could trigger a recession.