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Analyst: Expect Consumer Spending To Slow

As we told you--those U.S. retail sales numbers released today surprised analysts--coming in almost full percent higher than expected. Even though a Dow Jones poll predicted a rise of 0.2%-- overall sales registered at 1%. All sectors showed strong growth, particularly consumer electronics and appliances. So why were analysts so off the mark?

On "Squawk on the Street"--Michael Ryan of UBS Wealth Management Research says that these monthly numbers are hard to forecast. But even more importantly now, the reaction to the report is also off. One month of strong numbers doesn’t counteract the slowing trend we’re seeing in housing and the overall economy, he says.

“We just don’t believe that the pace of consumer spending can continue at the same level into 2007,” Ryan says.