[W]hat really gave the thrust to retail sales in January were energy and food prices. Gasoline sales rose 1.4%, the steepest increase since March of last year. The grocery bill also jumped 1.3% and this was also the largest run-up since August 2010. Strip out these two areas, sales barely rose at all last month — by less than 0.1% versus an average advance of 0.5% over the prior three months, and the weakest showing since last May! So the stuff you can’t substitute away from, at least over the short-term, is absorbing sales from wide swaths of the retail space — eating establishments aside. In real terms, it looks like spending outside of food and energy actually contracted to start of 2012...
I estimate that 35% of global GDP is now in contraction, and that share is up from 25% in Q4.
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