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Somewhat Thicker Gruel From Goldman

Earlier today I noticed that the silver lining from the Fed's beige book looked more like a copper-nickel alloy. But tonight's Goldman Sachs economic report has some genuinely (if modestly) encouraging news. In general, Goldman sees the consumer-spending cliff-dive stabilizing a bit in January and February, and believes the worst may be behind us on that front:

This morning’s results from chain-store retailers were better than (admittedly low) expectations, with our retail team’s Goldman Sachs Retail Index (GSRI) down only 0.1% in February on a year-over-year basis. An ongoing shift to lower-priced outlets is clearly at work, with discount stores up 2.4% year-over-year and department stores down a whopping 8.5%. But spending at discount stores is still spending, and this follows on the heels of January data that showed an increase of 0.4% in real consumption for the month. 

Goldman offers a few explanations for why this might be happening, the most compelling of which (to me anyway) is that: "a large cost-of-living adjustment for Social Security payments in January provided an annualized benefit of $67bn."  

Of course, as the report notes, the Goldman index isn't quite as comprehensive as the government's retail sales and spending numbers, so it's possible that the flattening out here is a mirage.

--Noam Scheiber