(+) The most heavily-looked at report last week, retail sales, registered a stronger-than-expected result for February, up +1.1% versus a consensus estimate of +0.5%.  The headline figure was aided by a +5.0% gain in gas station sales (in line with higher gasoline prices).  Auto sales and building materials, both cyclical and choppy month-to-month, were up +1.1% and helped the overall results.  The next level of ‘cleaned-up’ data, retail sales ex-autos, gained a still-respectable +1.0% that beat the expected +0.5%.  Lastly, the ‘core/control’ retail sales number (which excludes autos, gasoline and building materials, and represents the figure that corresponds most closely to the consumer spending segment of the quarterly GDP report) gained +0.4%, double the expected +0.2% increase.  In addition, increases were broad, with strong results in ‘general merchandise,’ food/beverage and online sales.  What this tells us is that purchasing activity continues to improve—despite some fears of slowing due to this year’s payroll tax increases.  While still fairly low, this remains a tailwind in our favor. Read more

(+) The ISM Non-Manufacturing Index for February came in better than the expected 55.0 level with a small increase to 56.0.  New orders and business activity were higher, while employment deteriorated a bit (although still in expansionary territory).  Inventory expansion was also slightly higher.  Interestingly, anecdotal comments in the survey responses were optimistic with a general theme that business was ‘picking up’ in several industries in a more diversified way.

(+) Factory orders for January fell -2.0%, which was a touch better than the forecasted decline of -2.2%.  A large decline in aircraft orders (defense and non-defense—both of which are a ‘choppy’ series) accounted for a good portion of the result.  While ‘core’ (non-defense, non-aircraft) capital goods shipments fell -1.1% during the month, on the positive side, forward-looking core orders came in at a strong +7.2%.  Read more