Second month of positive signs in retail
Retail sales in the U.S. were boosted by the warm weather in March, which meant it was time to start buying garden supplies for many consumers.
Bob Moon: The Commerce Department reports retail sales rose more than expected in March, by a solid 0.8 percent. Let's do a reality check now with economist David Wyss at Brown University. Good morning, David.
David Wyss: Good morning.
Moon: So what were consumers buying last month?
Wyss: Just about everything -- but the big surprises, I think, there was a big jump in auto sales, which was a surprise since unit sales were down. My suspicion is a lot of that reflects buying used cars rather than new cars. And a big jump also in building materials and garden supplies, which is a bit of a surprise because the weather was good in March, but it also was very good in February; but March just counts more.
Moon: So Wall Street seems to be giddy over this. Is this necessarily such good news if it's things that don't add much to the jobs picture? It's existing vehicles, you suggest, and maybe a one-time phenomenon because of the good weather?
Wyss: Yeah, but on the other hand, February was up 1 percent -- so it's two back-to-back months that are strong. And you get two in a row, you start thinking there may be a trend developing here. The other thing -- up is still better than down. Yeah, it would be better if this weren't one-time things, if it weren't used cars, if it were new cars instead. But, you take what you can get here, and it's certainly a lot stronger than we've been seeing for the consumer.
Moon: Quickly to Europe -- the yield on Spanish government bonds soared above 6 percent for the first time this year today, on fresh fears about that country's finances. So why do you think European stocks have stayed positive today in the face of that news?
Wyss: I think two things. Number one, the stock market already knew about Spain. This is not a surprise; this had been going on for a while. If you didn't know about it, you shouldn't be trading stocks in the first place. The other thing is, people are becoming more convinced that the problems of Spain can be isolated from the economies of Northern Europe, which are still doing pretty well despite the problems in the Southern tier.
Moon: Brown University economist David Wyss, thanks very much.
Wyss: Thank you.