Retail Growth is Indeed Leading Us to Recovery

Just a reminder to everyone: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you'll have a pretty good handle on where the economy is headed.

You may remember several weeks ago strong January results from several retailers. The brightest report coming from Walmart which alone accounts for close to one quarter of the overall retail number. The government followed shortly there after with a "surprising" 1% growth number in retail for January alone.

What came as a huge surprise today was just how well Walmart fared in February.
Sales in Feb can truly be categorized as skyrocketing... total sales rose from $27.7B in Jan to $30.0B in Feb. That's an unheard of 98% annualized clip! And in a short month no less. Walmart quickly responded to these results by raising it's dividend payout.

Apart from Walmart, yesterday's report on retail chain stores indicated major improvements in February. Rates of sales contraction slowed significantly in the month. Not surprisingly, Walmart's chain stores once again led the report and posted their strongest results since June. Many other chains, in stark comparison to prior months, were extremely positive in their description of business conditions with some actually describing their retail traffic as strong.

This is quite possibly the firmest leading indicator to date on our growing list of well over 101 economic positives, that along with 43 Fed economists points to an overall return to US economic growth by summer.