US retail sales grew by 0.4% In January (seasonally adjusted) and fell by 21.4% (unadjusted). The unadjusted fall was in line with historical patterns. The quarterly growth rate however shows a slowdown in the growth rate of retail sales, but the overall pattern of declines is nothing untoward.
What is more important is the backdrop: US GDP growth has been dependent on resilient consumer demand (financed by lower savings and higher borrowing) amidst increasing global economic weakness. A fall back in consumer demand in the current quarter, given the large recent increase in inventory building, would be negative for Q1 2012 GDP and would negatively impact manufacturing and service sector activity. Much of the improvement in global PMI and leading indicators has been due to US economic activity.
Eurozone industrial production figures for December and GDP data for Greek and Portuguese GDP show no surprises. The bigger picture here is the sovereign debt crisis, fiscal austerity and the impact on lending in the financial sector. There is no real new information here.
Japanese industrial production increased 3.8% in December, but it is difficult to discern any positive trend given the volatility of the index and recent disruptions due to floods in Thailand. Additionally, an increasing amount of Japanese production is carried out abroad, making it difficult to assess the overall strength of corporate Japan .
Data sourced from the Census Bureau (US), METI (Japan), Eurostat (Europe).