It looks like March was another slow month for the retail industry. After all we have heard from the economists about a solid job market, high consumer confidence, and low fuel prices, why are we seeing weaker than expected sales?
It has been suggested that low oil prices and the west coast port strike are deteriorating the job market and consumer’s purchasing power and confidence, leading to negative retail sales trends. In the following article titled, ‘What’s the Culprit Behind Recent Retail Sales and Job Weakness?’ economists investigate these possible detractors and come up with a different conclusion. It is simply the weather.
The analysis in this article looks at key performance indicators by state to determine which issue was driving the data. By looking at job opening and labor turnover by category in the oil production and western states, they found layoffs and discharges actually decreased in those states, leading them to conclude that these issues were not overly contributing.
Next they looked at sales tax revenues by state and saw that states that would have been negatively impacted by the port strike or the low oil prices like California and Texas actually had some of the highest returns vs. year ago. It was states in the Northeast that turned in the lowest percentage returns on sales tax revenues in January and February.
So, while we can’t always blame it on Mother Nature, it does seem like she is the culprit to 2015 retail sales getting off to a slow start.