You wouldn´t guess that from the news:
Retail sales improved in April, suggesting stronger U.S. consumer spending this spring that should bolster broader economic growth as unemployment stays low.
In reality, what we see is that after a boost in the first two years of the expansion, which only partly compensated for the deep and persistent fall during the recession, retail sales grew only very modestly.
When the Fed relaxed its tightening bias in mid-2016, followed by the increase in consumer sentiment from the Trump election, retail sales growth perked up a bit, but that seems to be waning. Therefore, retail sales is not indicating a bolster to growth this spring!
Together with the release of lower than expected (and falling) inflation, the impact on stocks, the dollar and long yield was negative.
Contrary to the Fed´s reiterated opinion that the “economic momentum is good”, we view the economy as weakening.