With February CPI results not out until next Wednesday today’s retail sales of -0.1% have to be taken with a grain of salt. When factored for inflation the real retail sales number will be lower. If CPI In February is similar to the January reading of 0.3% then the February inflation adjusted real retail sales number will be -0.4%.

CPI fell each month in the last quarter of 2008 but returned to positive territory in January and with energy prices stable or higher it will remain positive. Though the February retail sales ex auto was an encouraging 0.7%, it is unclear that it, like January’s revised 1.5% real sales result was anything more than a consumer response to continued deep post holiday and now recessionary discounting. It is far too early to celebrate the return of the US consumer.