Two of the largest U.S. retailers recently reported strong Q4 results. Sales at Amazon rose +8.2% y/y, and same-store sales at Walmart rose +4.2% y/y, but its online sales leapt +43% y/y. By contrast the government’s December retail sales report was so bad that it lacked credibility, and may see a large revision. That report said that overall sales plunged -1.2% m/m, with losses in most major categories. Core retail sales, which strip out volatile items, were even worse at -1.8% m/m, the sharpest monthly decline in 19 years. The most unlikely detail of the report showed e-commerce falling -3.9% m/m, driving the y/y rate from a typical +11.1% to only +3.7%. The government report is an estimate based on a sample survey, but since Amazon and Walmart report actual results, they are more likely to be indicative of a healthy consumer. In other news, industrial production fell a sharp -0.6% m/m in January, the first decline in eight months. Manufacturing fell a steep -0.9% m/m, driving the y/y rate to +2.9% from September’s high of +3.8%. Inflation reports continued to show little price pressures. Weekly jobless claims remain historically low but have risen +19.5% in the last four weeks.
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Weekly Export Risk Outlook 20 February 2019