Back in February, when January retail sales plunged and every single expert said consumers stayed indoors prevented from spending what money they don't have on goods and services they don't need, we pointed out a tiny little fly in the ointment: Online sales tumbled far more than the headline and core retail sales prints.
Fast forward to today when today's retail sales report, the first one of the second quarter, was supposed to show that with "harsh winter weather" in the rearview mirror, consumers would finally unleash all that pent up spending, in a critical report to send Q2 GDP on its way to what some say would be a 5% GDP quarter (Goldman estimate: 3.9%).
Instead what it showed was that the spending in the first month of Q2 was far worse than even the last month of the fateful first quarter. Who could have possibly foreseen this? Oh yes, anyone who observed that the US household savings rate had recently tumbled to the second lowest print since 2008 to pay for the March spending spree, and as a result they were tapped out when April rolled around.
But the biggest surprise was that while consumers largely avoided spending in outdoor retail locations, a far uglier print was observed when looking at non-store retailers, aka online sales. At 0.9% it was even worse than the January drubbing.
Here is the spin: tapped out US consumers simply did not have money to go out and splurge after the March spending bonanza, which sadly fell in a quarter which as we already know, will have a negative GDP print and thus is a wash (due to weather, remember). However, as a result of the blamy (sic) spring weather, US consumers didn't spend online either, as they were forced to go outside and enjoy the lovely weather... where as already noted they didn't spend any money either.
See, that was easy.