Europe Gaining Ground on U.S. Growth Rates
U.S. GDP is looking ugly in the short run, while Europe is making a comeback against the odds.
This week’s economic data seemed to suggest stabilization, if not outright economic improvements in Europe and China. In the meantime, the list of apparent woes in the U.S. increased again, with industrial production for manufacturing joining last week’s shocking retail sales decline and surprising return to deflationary CPI data.
We aren’t sweating those soft U.S. reports, just as we weren’t jumping up and down over a couple of really strong reports earlier in the year. Using year-over-year averaged data for retail sales, industrial production and inflation are all within recent trends or even slightly improved. We always worry about months with 31 days that can often cause weird average daily sales results. We continue to believe that the number of paychecks in a month and not the number of shopping days would provide a fairer selling-day adjustment. A shifting Easter holiday and unusually warm weather in February and a much more normal March are wreaking havoc with the month-to-month data sets in the U.S. for anything that depends on the weather, especially utility usage and apparel sales.