Ian Shepherdson Huge Quotations

Given the huge decline in consumer confidence, this (gain in spending) does not seem unreasonably weak, especially with consumers' real after-tax income growth slowing too.

Still, this is a hugely encouraging report, pointing clearly to a vigorous recovery.

The improvement in the stock market is allowing the hugely favorable monetary and fiscal environment to do its work -- just as it was in the spring before the stock market melted down,

Core sales slowed hugely at the end of the year, almost certainly as a result of the cash flow hit caused by the post-Katrina leap in energy prices. This is now over, and sales should rebound strongly in the first quarter.

A big headline drop was always in the cards after the weather-assisted surge in January, which hugely boosted retail activity.

The mystery is how to square with this with both the Redbook and Bloomberg chain store sales surveys, which pointed to a huge gain, ... Maybe it will come in March, or today's numbers will be revised up. Either way, this is a brief diversion, not a change of course.

It is disappointing in the wake of the huge rise in the Empire State survey -- the indexes are usually at similar levels,

This hugely strong report will doubtless be cited as evidence that the housing market is not slowing. However, the extremely warm January weather surely distorted these data, just as it boosted retail sales and depressed industrial production.

We expect the index to fall over the next couple of months as the latest huge surge in gas prices bites.

The gains were uneven, however, with small declines in clothing and electronics, a decent 0.7 percent rise for general merchandise and a huge leap for non-store retailers. Provided January holds up -- surveys suggest so far, so good -- the overall holiday season will have been pretty good.

Over the next few months we expect starts to strengthen as reconstruction begins on the Gulf Coast - the rise in permits may be an early sign - but elsewhere starts still need to lag sales. Demand is still huge but there are too many new homes for sale.