There certainly is a lot of information to unpack from this morning’s retail sales and inflation reports, and what they mean for wages and jobs. I’ll address them in separate posts.
First, retail sales. They certainly were a disappointment, coming in at -0.3% nominally and -0.2% in real terms. That being said, the monthly reports are somewhat noisy. We commonly get several of these a year, as shown in this graph of the monthly change in real retail sales for the last 7 years:
The YoY% change in real retail sales barely budged, and remains higher than for most of 2016:
So while yes it is disappointing, there’s no reason to hyperventilate.
While on a monthly basis there is way too much volatility, over the longer YoY measure, real retail sales do generally lead jobs by 3-6 months (averaged quarterly to reduce noise):
Since YoY real retail sales in 2017 have been generally better than 2016, there is no reason to think that the jobs situation is going to deteriorate substantially in the next few months.