Wednesday's report on retail chain stores indicated major improvements in February. Rates of sales contraction slowed significantly in the month. Not surprisingly, Walmart's chain stores once again led the report and posted their strongest results since June. Many other chains, in stark comparison to prior months, were extremely positive in their description of business conditions with some actually describing their retail traffic as strong.
Future earnings in the retail sector is going to be sluggish. Cutting costs helped this cycle, however, credit problems, home equity issues, rising unemployment doesn't bode well for gains in consumer spending going forward.