Easter shifts often create havoc with March-to-April economic comparisons, evident this morning in weekly jobless claims as well as today's monthly chain-store reports. This year's Easter shift, to the first weekend of April from last year's second weekend of April, pulled in an enormous amount sales from April, a month that has been essentially robbed. The year-on-year sales effect for chain stores ranges from about 2 percentage points to as much as 10. Warm weather, that drove in traffic especially late in the month, is also a factor behind the March's enormous gains, gains that point a third straight month of strength for the Commerce Department's ex-auto ex-gas category.
But there is telling evidence that March's gains are more than just Easter related. A heavy run of chains raised their earnings guidance this morning indicating that the extent of the gains is a surprise. But the roughly 50 chains that have reported March results so far are dominated by apparel, a component that makes up only 5 percent of total sales and which especially benefited from the warm weather. Still though, warm weather no doubt helped other components as well.
Two key components for retail sales look to post monthly gains as well: new car sales which make up 12 percent of total sales and gas which makes up 10 percent. The March retail sales report, to be released next Wednesday, looks to be a blockbuster, with gains looking to exceed the drag from seasonal adjustments. But the final verdict on March will depend on April's results, as only the combined two-month view will fully neutralize what ICSC-Goldman calls the biggest Easter effect since 1994.