As the saying goes, "Facts are stubborn things."
- Retail sales increased 1 percent in May. The consensus forecast was plus 0.5 percent.
- Retail sales excluding autos increased 1.2 percent. The consensus was 0.7 percent.
- Sales were also revised, up substantially for March and April.
So tell me, Brian Wesbury and Bob Stein over at First Trust Advisors, what's it all mean?
Today's report is the final nail in the coffin for the theory that the U.S. is in a consumer-led recession. Total retail sales are up at an 8% annual rate in the past three months while "core" retail sales are up at a 10.2% rate. It is impossible to be in a consumer-led recession when retail sales are growing so rapidly. Some analysts will attribute the strength in sales to the tax rebate checks that started being sent at the very end of April. However, sales were revised, up substantially for March and April, and core sales (excluding autos, building materials, and gas) in March and April were about as strong as in May, suggesting the rise in consumption is based on fundamentals, not government checks. Today's report creates considerable upside risk to our forecast of a 1.5% real GDP growth rate for the second quarter of 2008.