DOGE-cession(?)

Collapsing retail sales, autoloan defaults spike, DC homes on the block . . . oh my!

• retail sales tank(?)

• auto-loan delinquencies on the march

• DOGE effects in DC are real, but also mysterious

• are DC homes really up for grabs?

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Doge-cession?

A few negative signals . . . is the worm turning?

Retail sales tank(?)

Right after inflation printed ‘hot', retail sales printed cold.

While expectations were somewhat tepid to begin with, the survey results for retail sales were substantially worse:

Parker Ross

Retail sales declined 0.9% mom.

The big loser was “nonstore retailers” i.e. e-commerce, but really everything was negative (outside of “general merchandise”). This would constitute the biggest one-month move backwards since March 2023.

And it did, in fact, catch the street by surprise:

The median estimate was 0.3%, making -0.9% nearly a 5 sigma miss.

So, surveyed results for retail sales were very disappointing. Is that a bad thing? Is doom finally nigh? Random Walk (still) doesn’t think so.

Outside of the easy excuses, e.g. cold weather, and/or a pull-forward of ecommerce demand via holiday discounts, there’s a simpler reason not to worry. What’s that? Well, the slowdown of the Almighty Consumer doesn’t track with the transaction data.

According to JPM’s spending panel, the picture is just fine: