After a few disappointing prints of retail sales data at the end of last year, January’s 5.3% growth in retail sales far exceeded expectations of 1.1%. The end of year stimulus bill helped propel spending along with momentum on vaccine distribution, leading to the surge in activity that was most pronounced in discretionary spending, such as department stores, restaurants, furniture, and electronics.
Manufacturing output also rose more than expected in January, at 1% over December, putting the string of growth at four months. This beat expectations of a 0.7% gain and slightly above the 0.9% gain in December. According to the Fed’s measure of factory output, it is now 1.9% below its pre-COVID level.
Initial jobless claims popped up to 861K, worse than the 773K that was expected. Last week’s figure was revised up 55K to 848K.
Friday, February 19th marks the one year anniversary of the start of the COVID-19 sell-off when the S&P 500 began its decline from all-time highs. The selloff was sparked by global supply chain disruptions and further exacerbated by economic shutdowns around the world. When compared to other selloffs of 25% or more, the 2020 decline and subsequent recovery added two more 2020 entries for the record books.