00:00 Speaker A
Retail sales surging in March seeing the most largest and the biggest monthly jump in two years, boosted by a surge in car purchases ahead of President Trump’s planned tariffs on the industry. The pre-tariff activity showing consumers rushing to buy goods ahead of the high trade levies. Joining us now for more, we’ve got Moody’s Analytics Chief Economist Mark Zandi. Mark, good to see you here this morning. Just want to take us into your first reaction here, most notably on the retail sales picture. What are you seeing there?
00:43 Mark Zandi
Yeah, I think you got it right, uh, Brad. I think there’s a lot of forward buying, uh, particularly for vehicles. Uh, I think the consumers were are well aware of the tariffs and the impact that that’s going to have dead ahead and decided to get that car before it’s price increased. So I think if my memory serves, we sold 17 and a half million cars, vehicles, light vehicles in the month of March. It’s annualized obviously and that’s up million and a half compared to where it was prior to that, kind of the underlying trend. Uh, so, you know, I think retailing’s okay through March. The four buying certainly helped, but obviously that steals away from future consumer spending and retail sales which augurs, uh, poorly for the future.
02:00 Speaker A
How poorly for the future, Mark? I wonder, I know I know that you had a recession call of around 60% odds of a recession as of April 10th. Where does that call stand for you today?
02:18 Mark Zandi
About the same. It’s I think odds are better than even, um, matter than that we’ll suffer recession starting at some point this, uh, this year. Uh, to be precise, 60%, so that hasn’t changed. Uh, you know, I I I think there’s still a 40% chance we don’t go into recession and it depends on what the Trump administration does with the tariffs. If, uh, they take an off-ramp here and continue to de-escalate, lower the tariffs that they’ve imposed or threatened to impose and figure out a way to, you know, cool things off, then we’ve got a chance to maybe get through without a downturn. But it doesn’t feel like what’s going to happen, at least not right now. Uh, and, uh, if the trade war continues to intensify, uh, I think a recession is more likely than not.