Retail sales fell more than expected in February, coming in 3% below January’s figure. Now that sounds very bad, but there are a few things to remember:
- January’s figure was revised up to a 7.6% gain, a blow-away number helped by stimulus payments.
- That stimulus money faded away by the time last month came around, which is why economists had predicted a February decline in retail sales.
- Unseasonably cold weather, particularly in Texas, was another big reason for the contraction in retail sales.
If only we could have done something about the lack of a stimulus and the harsh weather, we would have seen a much better number.
Wait a minute, didn’t we just pass a $1.9 trillion stimulus, and isn’t spring starting Saturday?
Problems solved, but there is even more good news. Remember that February’s employment report showed a gain of 379,000 jobs, and initial claims for unemployment just fell to a four-month low.
The surge in vaccinations—111 million doses administered as of March 15—will allow more of the economy to reopen, bringing even more jobs and lots of spending with it.
So, it’s a pretty safe assumption that retail sales will come in higher in March.
With predictions that one-quarter of U.S. malls will close in the next three to five years, it’s easy to imagine them disappearing completely. I, like most other Americans, buy a ton of stuff online, and this has grown exponentially since the pandemic.
But the nostalgic side of me wants malls around forever. I grew up across the street from the Green Acres Mall, and have fond memories of the arcade where my grandmother would take me, and the places we would eat. I even worked in the Sam Goody there in the late 1980s. My wife and I took my son to the Sunrise Mall all the time, always stopping to get a toy if he behaved. That mall was just sold for 20% of its 2005 purchase price. Depressing.
There is some recent good news, however, as the nation’s largest mall owner Simon Property Group is seeing shoppers return to its malls. They also say tenants are starting to pay their rent on time. But some analysts think large owners like Simon are benefiting from many of their rivals shutting down.
Expect drastic changes if malls are going to survive. Many owners will try to convert unwanted space into fulfillment centers, apartments, and anything else local governments will allow.