Gary Brode of Deep Knowledge Investing and Robb Fahrion of Flying V Group discuss the 5 Things to Know in Investing This Week: The Halving Issue

-Good or bad economy, the American consumer continues to spend.

DKI Summary:

Retail sales were up 0.7% this month. That was well above expectations of 0.3% and annualizes to 8.7%. Most of that increase was higher prices as the CPI was up 0.4% from the prior month, and DKI thinks the CPI is understated. Higher gas prices also have an impact even as Americans commute less than they did a few years ago.

DKI Takeaway:

While I think it’s unwise to live beyond your means, it’s easy to understand why consumers keep spending. The government exercises no spending restraint and refuses to acknowledge tradeoffs between program benefits and costs. Bank bailouts in 2008 are still fresh in the memories of many, and now, people who never went to college are about to get the bill for the degrees of others. Neither the banks, nor the universities, nor the people who financed the student loans will suffer those losses. In this environment, who’s left to credibly preach financial restraint?

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This week’s written version of the 5 Things with graphs:

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Enrique Abeyta:

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Twitter/X: @HX_Research

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Retail Sales up 0.7% for the Month

Recent data released by the Department of Commerce shows that retail sales in the United States were up by 0.7% for the month, indicating a positive trend in consumer spending. This increase comes as a welcome sign for economists and analysts who have been closely monitoring the state of the economy amidst wider concerns about inflation and consumer confidence.

The rise in retail sales can be attributed to a combination of factors, including the recently implemented stimulus packages aimed at boosting consumer spending and the reopening of businesses following pandemic-related closures. With more Americans receiving financial assistance and feeling more comfortable engaging in retail activities, the increase in sales was a natural outcome.

This uptick in retail sales is particularly significant in light of the current inflationary pressures facing the economy. As the prices of goods and services continue to rise, consumers have been cautious about their spending habits, leading to concerns about the overall health of the economy. However, the latest data on retail sales suggests that consumers are still willing to spend, albeit at a slightly slower pace than before.

The increase in retail sales is also a positive indicator of consumer confidence, which is essential for a strong and sustainable economic recovery. When consumers feel optimistic about their financial situations and the overall state of the economy, they are more likely to spend money, thus driving economic growth.

Despite the positive trend in retail sales, there are still challenges that lie ahead for the economy. Inflationary pressures continue to be a concern, and uncertainties surrounding the ongoing pandemic and its impact on businesses and consumers remain. Additionally, the recent surge in new COVID-19 cases in some parts of the country could potentially dampen consumer sentiment in the coming months.

Overall, the increase in retail sales is a promising sign for the economy, indicating that consumer spending remains resilient despite external challenges. By closely monitoring economic indicators like retail sales, policymakers and businesses can better understand consumer behavior and make informed decisions to support economic recovery and growth.