BAML: Ignore Latest Retail Sales Set Back

If the economy is so booming, why did retail sales (ex-autos) decline -0.2% in February? Searching for the usual suspects to blame for unwanted economic data – the weather created a bad hair day, the sun got in consumer’s eyes – Bank of America Merrill Lynch looks at a seasonally consistent phenomenon: tax refunds. Causation for slowing retail sales being based on a one-time factor such as a tax refund results in the bank analysts not to consider this a trend changing event. The impact of online retail sales aside, it is those who are dependent on a tax refund to spend that are the one time factor in weak retail sales.