Today retail sales came out, and while we had a month to month contraction, we are still showing good growth year over year. However, this is all BC Before Coronavirus
“Advance Estimates of U.S. Retail and Food Services
Advance estimates of U.S. retail and food services sales for February 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $528.1 billion, a decrease of 0.5 percent (±0.4 percent) from the previous month, but 4.3 percent (±0.7 percent) above February 2019″
Just like jobless claims data was falling the last two weeks, don’t let this provide a false sense of reality. We are in full domestic and global social distancing now, and that does come at a significant economic price. Because of the nature of monthly data reporting, we can’t capture yet the full economic impact of this agent of the Devil.
Jobless Claims Vs. The Coronavirus
While these charts all look expansionary like a lot of the recent economic data, this is before the Coronavirus. We are about to get walloped, hence my WWIII thesis on fighting this virus short term. I truly believe by September 1st, 2020, we will be in a better place against this Virus. However, the pain is going to be profound for specific people and sectors, and we have tools to weather this storm until the world defeats this demon.
America Its Time To Declare An Economic War Against Cov-19
Regarding the term recession. A lot of people have been asking me about this.
Yes, we can have a possible Q1 positive print, A terrible Q2 data, and a positive Q3 & Q4. In the traditional sense, we wouldn’t be a recession. I don’t believe we should be looking at it this way currently. We are in WWIII right now vs. this virus, and we are asking people to stay home while we fight this demon. Our economy is going to pay a high price for fighting this war, and the economic damage in the 2nd quarter is enough to qualify it a recession. We can weather this storm as much as we can, but this doesn’t mean the pain isn’t going to happen. Even if it is for just one quarter, the severity of a domestic and global shutdown of ordinary life is something we haven’t dealt with in recent history. I am a firm believer in my September 1st, 2020 thesis that we will be in a better place against this virus, but this shouldn’t hinder us from doing massive fiscal and monetary stimulus with a whatever it takes attitude.
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.