The economic data has exhibited unusual noise recently, a Bank of America Merrill Lynch report notes. Retail sales ex-autos, for instance, which BofA previously advised clients to ignore, has exhibited volatile month-over-month performance. But perhaps more noteworthy is the correlation divergence between “hard” economic data, such as retail sales, and “soft” data, such as consumer confidence. In unpacking what is behind the sharp rise in confidence, there could be a rough road ahead.
Retail sales have been volatile recently
Looking at its internal consumer spending data that is derived from credit and debit card statistics, BofA’s retail sales ex-autos increased 0.4% in March.
The month-over-month volatility in the number is noteworthy as...
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