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Illustration: Aïda Amer/Axios

Economists are still in the dark about how a variety of factors — including the stock market slump, the government shutdown and ongoing trade tensions with China — impacted the U.S. economy.

The big picture: Economic indicators are moving to the downside, not the upside.

What we know: Thursday's release of the 4-week delayed U.S. retail sales report saw the biggest month-over-month drop since 2009. It was such a huge miss from the expected rise in spending that some economists are questioning the accuracy of the data.

  • "It appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected," the National Retail Federation said in a statement. "There's also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable."

"This is against the backdrop of the only data we had, which was the blockbuster employment numbers," Diane Swonk, chief economist at Grant Thornton, told CNBC.

  • December's 222,000 new jobs number was revised lower, but still remains above trend. Though, as we reported last month, jobs growth markdowns show the data may not be breaking out the way initial estimates suggest.

Key components that factor into measures of economic growth are still missing, leaving a gaping hole in economists' estimates for growth.

  • The health of business inventories in December remains unknown after contracting slightly in November, the Commerce Department said yesterday.
  • Factory orders in the U.S. fell more sharply than expected in November, but we still don't know whether that rebounded or fell further in December.
  • December trade data, also delayed, is not expected until the beginning of March.

The bottom line: The data we have so far is pointing to a sluggish end to 2018.

  • Jim O'Sullivan, chief U.S. economist at High Frequency Economics, tells Axios the lackluster retail sales data could shave as much as 0.7% off of economic growth in the 4th quarter.
  • Economists at J.P. Morgan downgraded their GDP forecast 60 basis points to 2.0% based on the latest retail sales figures, while Barclays slashed its growth forecast to 2.1% from 2.8%, Reuters notes.

Go deeper

Updated 12 hours ago - Politics & Policy

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Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

Trump impeachment trial to start week of Feb. 8, Schumer says

Senate Majority Leader Chuck Schumer. Photo: The Washington Post via Getty

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

The state of play: Schumer announced the schedule after reaching an agreement with Republicans. The House will transmit the article of impeachment against the former president late Monday.

13 hours ago - Health

CDC extends interval between COVID vaccine doses for exceptional cases

Photo: Joseph Prezioso/AFP via Getty

Patients can space out the two doses of the coronavirus vaccine by up to six weeks if it’s "not feasible" to follow the shorter recommended window, according to updated guidance from the Centers for Disease and Control and Prevention.

Driving the news: With the prospect of vaccine shortages and a low likelihood that supply will expand before April, the latest changes could provide a path to vaccinate more Americans — a top priority for President Biden.