Retail Sales Point to Economic Pickup in Q2

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Global household consumption of goods and services has increased 100% in the last decade but 95% of consumers reside outside the U.S.  China is now the largest auto market in the world.

Amid this week’s negative retail earnings news, a bright spot. Retail sales rose .4% in April to an all-time record high of $475 billion, bolstering the case for an economic GDP pickup in Q2. Non store retailers (internet merchants) and building materials and garden supply stores were the standouts while the brick and mortar vendors are still struggling. Consumer sentiment continues to be strong with the latest index reading of 97.7%. In addition, core inflation (CPI) which excludes food and energy was up, but only by .1%, lighter than expected. This muted inflation figure jives with the Fed’s plan for gradual rate increases. Investors may be distracted by all of the Washington tweets but the economic picture remains solid, #EconomicGrowth #DontTryToWashingtonProofPortfolio. Please watch retail sales and consumer spending on page 12 of the Global Perspectives™ book.

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