The latest retail sales data confirm that real consumption growth slowed to just above 1% annualised in the first quarter, well below the 5% pace seen in the final three months of last year. Given the past increases in the prices of essentials such as food and gasoline, there is a good chance that the weaker growth in sales volumes will persist through the second quarter. The most recent declines in commodity prices offer some hope, but probably not until the third quarter.
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