President Trump’s Tax Cuts Seen Halting a 3-Month Retail Sales Slump
For sure President Trump’s tax cuts have given a boost to Americans’ take-home pay this year.
The Big Q: Will the US consumer putting the extra cash toward savings and debt, or using it to go shopping?
The Big A: We here a HeffX-LTN believe some of each.
Early Monday retail-sales data is due from the US Commerce Department will help provide the answer, and economists are betting that consumers finally opened up their wallets a little wider, thanks in part to the boost in paychecks as well as Y 2017 tax refunds from their good ole’Uncle Sam.
Sales probably rose 0.4% in March from the prior month, based on the median estimate of we surveyed analysts.
That would break a streak of 3 straight decliners that was the longest such dip since Y 2015 and reflected the hangover from a debt-fueled, post-hurricane spending binge in Q-4.
“The US economy continues to create jobs in significant numbers and tax cuts are putting more money in American households’ pockets We suspect the cash flow story will win out, implying a positive outlook for consumer spending,” said economist Shayne Heffernan, PhD
A rebound in retail sales would be a sign that President Donald Trump’s tax cuts are helping drive growth in the US economy that is largely driven by consumer spending.
President Trump and the GOP-led Congress also slashed corporate taxes, a move partly meant to spur wages, which have yet to move significantly higher.
Stronger-than-forecast auto sales in March, based on industry data earlier this month, gave a boost to overall retail sales, as purchases of cars and light trucks rose to a 17.4-M annualized rate in March, the fastest YTD.
The tax cuts probably supported spending in March as consumer sentiment surged to the highest since Y 2004 during the month. While hiring eased from February, wage gains picked up and the jobless rate held at the lowest since Y 2000.
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Have a terrific week.