Lost in the chaos surrounding the blistering January inflation print, i.e. the market's worst case scenario which sent yields and the dollar soaring, and futures tumbling, was a just as troubling indication that the US consumer has officially tapped out, after January retail sales dropped by -0.2%, badly missing expectations of a 0.3% increase, and the biggest decline since February 2017.
In dollar terms, retail sales fell to $492.003BN in January vs $493.3BN in December.
Stripping away volatile auto sales did not improve the situation, with retail sales ex autos unchanged, far below the 0.5% expected.
Also unchanged were retail sales ex-auto dealers, building materials and gasoline stations, as well as the retail sales "control group" which excludes food services, automobile dealers, building materials and gasoline stations and which directly feeds into GDP, will send Q1 GDP forecasts lower relative to baseline expectations.
Looking at the breakdown of retail sales categories, 6 out of 13 categories rose vs 12 last January. Notably, non-store retailers, i.e. internet sellers, were unchanged in January: the first time this series has not grown M/M in years.