March Retail Sales Far Weaker Than Expected

The Commerce Department on Tuesday reported that retail sales rose only three-tenths of a percent in March, a gain that was roughly half of what forecasters had predicted. The pullback was seen by many as fresh evidence that households are becoming less and less willing to use disposable income for discretionary purchases, indicating growing fears among consumers about a range of economic matters that will impact them over the coming months. True to prediction made here on The Dark Wraith Forums this past Tuesday, the Johnson Redbook Survey of same-store sales at retail outlets claimed that "[c]ooler and wet weather reduced store traffic..."

In other news about the economy, the Commerce Department reported Thursday morning that business inventories grew by half-a-percent in March, while business sales were off by almost as much.

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Accumulating inventories indicate that demand for goods is not keeping pace with production. This can mean, among other things, impending job layoffs.

  The combination of these factors may point to growing weakening in the business sector, foreshadowing broader slack in business numbers in the months ahead. Inventories have been building without abatement for five straight months, providing strong evidence that a trend has set in. With regard to softening retail sales, among the many specific categories of department store and general merchandise goods not moving was clothing, a particularly troubling indication that consumers are holding back even on purchases of some of the more basic items.

Stocks on Wednesday took a hard beating, with the blue chip index of 30 giant industrials dropping almost exactly a full percent in value, sliding ever closer to the 10,000 point mark to which many investors had long ago believed the index would never even come close again. The broader blue chip index of 500 large corporations fell by well more than a full percentage point in value, and the massive NASDAQ composite index of thousands of smaller corporations' stocks fell by more than one-and-a-half percentage points, slipping ever farther to the South of the 2000-point mark that it had tried for weeks to hold as its baseline.

After Wednesday's punishing rout on Wall Street, CNN.com posted the headline Stocks Look Adrift, which some observers might see as akin to reporting a torpedoed ship as looking "aimless." Although sophisticated investors would discount CNN's less-than-accurate description of the situation in the stock markets, less well-informed investors could see such a headline as pointing to market conditions far less dire and therefore proceed with unadvisable investment activities. Such headlines fuel accusations that the mainstream news media is continuing undeterred in its long-standing efforts to mitigate and gloss over the economic failures of the Republican Party, which controls both the executive and legislative branches of government, and certain of whose members have in the past few days made veiled threats against uncooperative members of the third branch.