Prices say panic, but data says otherwise (even more cont.)

More comforting data from the slightly lagging frontlines

• more evidence that consumers did not pullback even a little

• consumer confidence is not a signal

• the headwinds are there, but they’re the same as they ever were, and tariffs ain’t got nothing to do with it

• a funny thing about uber drivers

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Another installment in the ongoing series of ‘actually the world is not ending (any more than it was a year ago).’

• Doge-cession?

• Doge-cession freakout

• Slower job growth has nothing to do with policy uncertainty

• Poking fun at GDP (and the doomsday chart-foulers)

• Prices say panic, but the data says otherwise

• Prices say panic, but the data says otherwise (cont.)

And now:

Prices say panic, but data says otherwise (even more cont.)

Here’s yet even more evidence that anyone blaming The Great Uncertainty and/or tariffs for “consumer softness” is probably lying.

If you try to raise prices for an inferior service? Yeah, then it’s possible demand got a little soft. If you set some absurdly high growth targets that are 2x wage growth, that too is probably a good reason to lower expectations.

But actual, real-live consumer softening?

No dice.

Check out this data from CNBC/NRF retail monitor.

Can you spot the consumer softness? Yeah, me neither:

CNBC/NRF

Total retail sales (net of gas and cars) grew 3.38% yoy in February. Exclude restaurants, and yearly growth rises to 4.11%.

4% growth is pretty darn good.

Now, if you got the impression that December (8.4%) was the new-normal, then I can see why you might be disappointed. I can also see why you might be an idiot, but we all have our moments.

Here’s another fun one.

“Consumer confidence” is collapsing! Doom is nigh!

Consumer Trends

Actually, it turns out that consumer spending has basically no relationship to sentiment, at all.

It looks like the last time that a decline in consumer sentiment meaningfully preceded a decline in spending was 2007.

It seems fair to conclude that consumer sentiment is pure noise, at least with respect to spending.

Look, it’s possible that retailers are worried that spending might slowdown, but there’s no evidence that anyone has actually slowed down (outside of the higher-end discretionary categories that have been slowing for a while). And remember, that tariffs caused a slowdown was the claim to kick off the panic—a panic that seems deadset on making itself a self-fulfilling prophecy.

Is it possible that businesses (rather than consumers) have slowed their spending? Perhaps, but the evidence mostly indicates that businesses ramped-up spending (perhaps to front-run tariffs).

There are headwinds, but they’re not new (and they’ve got nothing to do with tariffs)

Look, if you want to be worried about something, it’s that growth is normalizing to something less-impressive than what people expected.

And with asset prices keyed to historically high multiples of earnings (which only makes sense if you expect earnings to continue to grow a lot), then more realistic expectations could reset those multiples lower (bringing asset prices down with them).

Here’s the thing though: that growth would slow given that people-growth would slow should have been an obvious possibility—so obvious that it’s hard to believe it’s been that overlooked.

Healthcare makes all the jobs and job growth is a foreign born story (still true)

That job growth has been a healthcare and foreign born story has also been obvious (notwithstanding the shrillest efforts of the ‘firing on all cylinders’ crowd).

Likewise, it remains a bit of a mystery of where else growth will come from, once the labor-supply catch up was all caught up.

The slow and narrow labor market is still very much a thing: