Wall Street to You: Go Shopping Already!

Wall Street is reacting negatively today to weak retail sales data. Retail sales fell 1.1% in March. As a barometer of consumer spending, this unexpected slump may indicate that the economy is not yet rebounding.

How low will retail prices go?

According to the AP, the drop was far worse than the increase of 0.3 percent that analysts polled by Thomson Reuters had been expecting and marked the biggest fall in three months.

“The choppy data that we’re seeing, whether it’s economic or earnings, reminds us that we’re still not out of the woods,” said Sean Simko, head of fixed income management at SEI Investments in Philadelphia. “The market always has a tendency to go too far too fast.”

Despite what President Barack Obama and Federal Reserve Chairman Ben Bernanke may say in a speech, numbers like this carry more weight with investors and consumers. that there have been hopeful signs about the economy and that a sustained recovery will take time.

In a separate report, wholesale prices were also down. The Labor Department said wholesale prices dropped 1.2% in March as the cost of gasoline, other energy products and food fell sharply. While that all sounds great from a consumer perspective, falling prices can actually hurt the economic turnaround if consumers and businesses put off spending out of fear that they would pay too much for something today that could be worth less tomorrow.

The good news is you can help. Don’t wait, go shopping now. Just don’t put it on a credit card!

Image Credit: markhillary, Flickr