So remember the very real impact from the payroll taxes on retail sales and consumer spending? The latest round of retail sales is magically showing that somehow the impact might have been very temporary and the market has responded to it.

The Commerce Department reported that retail sales in the month of February rose by 1.1%, and even the ex-autos retail sales rose by 1.0% in February. Bloomberg was calling for a gain of only 0.5% and the highest call was 1.0% on the headline figure. The Bloomberg consensus on an ex-autos retail sales figure was only 0.6%, with 1.1% being the highest projection.

Today’s news may not seem massive on the surface, but it really helps to show the resilience of Joe Consumer. You can blame higher gasoline prices, as those prices peaked at the end of the month in February, for some of the lift as gasoline station sales were up a sharp 5%. Retail sales were down at department stores, furniture stores and at restaurants. Even if you back out gasoline sales, the gain was 0.6% for the month.

If you wanted a first guess, it shows that perhaps pay increases or job growth may have offset the lower post-payroll tax impact. S&P futures are still in the red, but they are down only 2.75 points after the news. DJIA futures have ticked up into positive territory.

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