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b'Retail Sales Down Three Months in a Row
\\nI\'ve got so much to talk about today, it\'s hard to even figure out where to begin.\\xa0 So I\'ll start with some of the economic data that came out today, in particular, the February Retail Sales number. Remember last month we had a bad number, -.3, the second month in a row we had a decline in retail sales.\\xa0 The expectation was for a big rebound in February, +.4. Now, I suppose the good news, if you are looking for retail sales to pick up is that they revised the January number upward from -.3 to -.1.\\xa0 Still a drop, but not quite as big. But instead of getting a rebound, we got another drop! We got another .1% decline in February.\\xa0 That\'s a trifecta. Three months in a row of falling retail sales. That hasn\'t happened in 6 years. This is pretty rare.
\\nGreat Jobs, Lousy Sales
\\nWhy is this happening? Remember on Friday, we got this "beautiful", too-good-to-be-true, just what the doctor ordered jobs report that said about a million people got jobs. Why didn\'t any of those million people take their paychecks and spend them at a retailer? Trump is talking about all the great jobs and all the raises that people are getting and all the tax cuts, why are retail sales down for 3 months in a row?
\\nSpike in Inventory Numbers
\\nIn fact, we also got some inventory numbers that came out that spiked up because of an 18-month slump in sales.\\xa0 So inventories are building because nobody is buying what\'s on the shelf. Well, that doesn\'t make sense if you believe the economy is great and we\'ve got all these jobs. But if you\'re like me and you\'ve been very skeptical of the economy being good, this is a validation, because Americans are broke.
\\nBorrowing at Record Highs
\\nThis is despite the fact that borrowing is at a record high.\\xa0 Consumers are borrowing a lot of money, yet they\'re not spending it on retailers, what are they doing with the borrowed money? The government is borrowing a lot of money, we\'re running these huge deficits, yet it is not even affecting retail sales. That is really the goal, they want people to go out and shop, and it\'s not happening.
\\nAtlanta Fed Again Lowers Q1 GDP Estimate
\\nAfter the retail sales numbers came out, we got the Atlanta Fed updating their forecast for Q1 GDP.\\xa0 Remember, this is the forecast that was at 5.4% about 5 or 6 weeks ago.\\xa0 Of course, you remember on my podcast, as soon as that came out, I said, "This is crazy.\\xa0 There\'s no way we\'re going to be anywhere near that. They will be doing this limbo for weeks and months and they\'re going to be lowering the bar".\\xa0 On Friday, I reported on my podcast that they has lowered the bar to 2.5%, the lowest forecast since they started forecasting Q1 for 2018.\\xa0 And what I said on Friday was, "They aren\'t done going lower. there\'s room for this bar to go down". I said I thought that the GDP for Q1 would be under 2%.
\\nGoldman Sachs Also Lowers Q1 GDP Forecast to 1.9%
\\nToday, after these retail sales numbers, the Atlanta Fed went down to 1.9%. That is a decline of 65% in their forecast from 5 or 6 weeks ago.\\xa0 It\'s not just the Atlanta Fed.\\xa0 Goldman Sachs is now at 1.9%.\\xa0 And you know what?\\xa0 This is probably not the low water mark. I think there is at least a 50-50 shot that we end up with a zero handle on Q1 GDP.
\\nBorrowing Q2 GDP Growth and Shoving it into Q1
\\nGiven how weak the data has been coming in, especially the big trade deficits.\\xa0 The only reason we might end with a 1 handle and not a zero handle is these rising inventories.\\xa0 In the short run, they give a boost to the GDP, but if inventories are rising because nobody is spending, what does that mean? That means that businesses are going to allow the inventories to wind down, they\'re not going to keep stocking up.\\xa0 So what we\'re doing is we\'re borrowing GDP growth from Q2 and we\'re shoving it into Q1.\\n\\nOur Sponsors:\\n* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.com/ \\n\\nPrivacy & Opt-Out: https://redcircle.com/privacy'