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By Jason Stipp | 02-15-2012 11:00 AM

Is Something Wrong With Retail Sales?

This week's retail sales data was not as disappointing as it seemed, says Morningstar's director of economic analysis Bob Johnson.

Jason Stipp: I'm Jason Stipp for Morningstar.

We got retail sales data this week, and it disappointed a lot of market watchers. Morningstar's Bob Johnson, our director of economic analysis, is here to give us his take on the report and why it might not be as disappointing as it seems.

Thanks for joining me, Bob.

Bob Johnson: Great to be here.

Stipp: So, before we talk about the specifics of the report, I'd like to talk to you,  first of all, about what were the results of this particular retail sales report that disappointed, and then how do you look at the report, and why wasn't it as disappointing to you?

Johnson: Well, this is the government's most comprehensive report of retail sales, and it includes autos, it includes gasoline, it includes restaurants. There is almost no other report that has all of these rolled up into one. And it comes in the middle of the month, and so people like to use that to predict what the consumption number is going to be, and that doesn't come out for another two weeks yet. So, this is the first, early read on how the consumer is doing, and that's why people like to look at this number.

Stipp: So it sounds like there's a lot of stuff thrown in there. What was the number that disappointed people, and how do you look at the number, how did you gauge the report?

Johnson:  The headline number was, we got 0.4% growth. People were looking for a full 1%, but the big deal is, that includes the auto [sales]. And if you stripped out the auto, the numbers performed better than expected in retail sales in most categories. So, the report was very positive. Everybody was characterizing it as weak, and the auto market was falling apart, but it's not.

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