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Happy St. Patrick’s Day – Economic Reasons to Celebrate!

By March 17, 2015CMF Blog

With brutal weather patterns throughout the country in the month of February, comparative store sales (for those that have reported then) have shown a decline according to the APT Index, with an average decrease of 0.9% compared to February 2014, including 4% decreases for both McDonald’s and Gap.

Although March surely came in like a lion, in looking at some other causal data points, we think comp sales are going to rise again, due to:

  • The continued drop in unemployment, particularly as those who have education levels of “high school only” or “some college” get back to work;
  • The non-Federally instituted raises in base pay that are becoming the norm at companies including Walmart, T.J. Maxx and Marshalls, Ikea, Gap, and Starbucks, all of whom have voluntarily increased their internal base pay
  • The decline in gas prices from six months ago, which should also help lower-wage earners, who typically spend 13% of their pre-tax income on gas or motor oil

We see this trifecta of more jobs, higher base pay, and decreases in transportation expenses as the basis for economic growth for the American consumer; CMF is sticking to the call made in November 2014 that GDP growth this year will be 3.7%.

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