True State of the Economy

So, what is the true state of the economy? At least a half a dozen retailers including Dillard’s (DDS) are getting hammered this week. Then we have two economic data points that make the economy seem like its humming on all cylinders.

At an increase of 1.35%, Retail Sales blew away the estimate with its best month since March 2015. It’s a headscratcher, although a deeper dive illustrates how this number could co-exist with the awful news in the stock market last week.

The number was driven by Internet shopping, which posted the best year to year improvement. Gas stations got a boost as crude rebounded, lifting gasoline prices along, and motor vehicle sales continue on a blistering pace.

Conversely, clothing keeps plodding along, and surprisingly, restaurants were virtually unchanged belying the great numbers for Jack in the Box and Shake Shack.

Even though the data was upbeat, the fact is, the stock market is skeptical. You’re skeptical as well. I’m skeptical, too.

Last week was a tough, but not devastating, week for the stock market.