It was all inflation, running at 3.4%: Advance retail sales in April up 3% year over year, but flat from March to April

You're just shelling out more for the same stuff, not buying new stuff.

“Today’s retail sales report reflects a pullback in consumer spending that retailers have called out in recent earnings reports,” said Claire Tassin, retail and e-commerce analyst at Morning Consult.

Compared with last April, sales were up 3%, but the Census Bureau doesn’t adjust the data for inflation, which came in at 3.4% on an annual basis in April, according to the latest consumer price index report. That suggests that the sales gains from a year ago are “entirely attributable to inflation, not increased consumer demand,” Tassin said.

Barron's, reproduced here.

The poor retailers

 

Shrinking food stamp benefits for families mean yet another challenge for retailers

LOL, nominal retail sales were up 7.7% year over year in Friday's report, but when adjusted for inflation were down 0.5% year over year

 Put another way, it went up because you're paying more for food and energy, not because you're letting the good times roll.

YOU ARE SPENDING MORE FOR FEWER THINGS:

Rising costs for food and gasoline in particular helped propel the increase.   

More.

Legalize mental and mental will trickle down

Illinois Governor J.B. Pritzker signed a bill into law in June 2019 legalizing the recreational use of cannabis by adults, including retail sales beginning on Jan. 1, 2020. The following article covers Illinois' current cannabis laws with summaries of provisions under these laws.

More.

 

 

 

Alleged shooter in Highland Park July 4 parade attack charged with 7 counts of murder…

Correct take: Exuberance about retail (AP) leaves out that consumers are borrowing big to finance it

Clueless AP article calls US economy resilient when it's been in the rut they fear is coming since 2007

The compound annual growth rate of real GDP since 2007 has been WORSE than for the same time frame of the Great Depression, yet AP is completely oblivious. The upside is when things really go to hell they'll still be.

As global economic picture dims, solutions seem out of reach:

Barely a year after most of the world’s major countries were enjoying an unusual moment of shared prosperity, the global economy may be at risk of returning to the rut it tumbled into after the financial crisis of 2007-2009. ...

The U.S. economy, now enjoying a record-breaking 10-year expansion, still shows resilience. American consumers, whose spending accounts for 70% of U.S. economic activity, have driven the growth.

Retail sales have risen sharply so far this year, with people shopping online and spending more at restaurants. Their savings rates are also the highest since 2012, which suggests that consumers aren’t necessarily stretching themselves too thin, according to the Commerce Department.

Real retail in Mar 2019 y/y is growing at less than half the rate it was in Aug 2018

"Investor confidence cracking" in US, record flight to cash in the last week as China misses on two big measures

 Uh oh.

Record $46 bln pulled from US-based stock funds in a week, according to Lipper:

More than $46 billion thundered out of U.S. stock mutual funds and exchange-traded funds, the most ever, while a near-record $13 billion poured from bonds, according to the research service. Relatively low-risk money market funds pulled in $81 billion, also the most recorded, the research service's data showed.

The withdrawals appeared to show investor confidence cracking in the waning days of a wild year of up-and-down trading that has left many people with losses across both stock and bond funds, a rare occurrence.

China just reported 'ugly' industrial output and retail sales growth that missed expectations:

The weaker Chinese data in November shows that the positive impact of front-loading had begun to taper off and that downward pressure on the Chinese economy was increasing, wrote Sue Trinh, head of Asia foreign exchange strategy at RBC Capital Markets in Hong Kong.

The industrial output and retail sales data released on Friday were "ugly," she added in a Friday note.

 

 

Fake news: Drudge contributes to the false boom narrative

Drudge links to a Zero Hedge story, which doesn't use the word "boom". But Zero Hedge doesn't get it right, either. It calls the May 0.8% monthly percentage "surge" in retail sales "the biggest since January 2017" absent the hurricane surge in September 2017. Not true: The actual 0.76% spike in May 2018 was bested by November 2017 at 0.79%. They both round to 0.8%.

But was the 0.8% significant? The only way to know is to look at what has happened in May in the past, and from that we conclude that May 2018 was obviously up but unremarkably so. We did better in May 2008 and 2009 for crying out loud, in the middle of a deep recession, which just proves it takes a while to get people's attention, even after you beat them in the head with a 2 X 4, multiple times.

The bottom line is retail is struggling over the long haul. The trend isn't up even a full half point after 18 years.

Expect Rush Limbaugh to trumpet the fake news nonetheless.

Another Obama achievement: deliberately bankrupting coal companies, destroying jobs and making electricity more expensive

From the story here at Bloomberg yesterday detailing the coal bankruptcies:

Obama has backed tougher limits on carbon dioxide blamed for climate change.

New mercury standards that took effect last year led utilities to retire 23 gigawatts of coal-fired electricity, according to Bloomberg New Energy Finance.

On Friday, his administration said it will stop leasing public land to coal developers and will weigh raising royalty fees for exploration while it studies the fuel’s environmental impacts.

Both production and demand for coal this year will fall to the lowest level since 1983, the U.S. Energy Information Administration said this week. ...

Arch [Coal Inc.] has followed Alpha Natural Resources Inc., Patriot Coal Corp., Walter Energy Inc. and James River Coal Co., in bankruptcy.

In other news, mining (129,000) and logging jobs (2,000) declined 131,000 in 2015, the biggest decline since 1986 and the third worst year of declines since 1939.

Since 2007 net generation of electricity from coal has declined by almost 30% through October 2015.

While retail sales of electricity in 2014 are almost exactly identical to such sales in 2007, measured in kilowatthours purchased, the cost of that electricity has gone up over 18% over the same period as coal's role is being deliberately curtailed.

"Retail and Food Services Sales" falls 0.94% in December, which is cautionary for GDP

The drop is not that odd for a December.

In December 2007 we had a drop of 0.6%, in December 2008 a drop of 2.5% (part of the big whopper decline of 12.25% between summer 2008 and March 2009), and in December of 2011 a drop of 0.3%.

The drop in January 2014 when GDP went severely negative was 1.26%, so the 0.94% magnitude this time does not augur well for 4Q2014 GDP.

Warped New York Times views inflation as sign of increased demand

Nelson D. Schwartz, here:

Besides the increase in consumer prices reported on Thursday, data Wednesday on producer prices showed a rise of 0.6 percent last month, the largest increase since September 2012 and an indication that demand for a number of basic goods is growing faster than economists expected.

Never mind industrial production fell 0.6% (expectation was 0.0%) along with capacity utilization, which dropped to 78.6% (expectation was 79.2%). Import prices were down 0.4% (expectation was for an increase of 0.3%). Retail sales also disappointed up just 0.1% vs. expectation of 0.4%. The expectation ex-autos was even higher up 0.6%, and the disappointment even lower with a flat 0.0%. Crude oil supplies were up .947M when they were expected to be down .400M. The housing index came in lower at 45 vs. expectation of 49.

Against this backdrop of soft demand, higher producer and consumer prices along with back to back months of flat wages are indicative of nothing so much as . . .

PAIN.

Which is what, evidently, The New York Times enjoys inflicting the most. 

The New Yorker Magazine Engages In Pure Fantasy About The Underground Economy

This is your stereotypical New York look-down-your-nose-at-the-rubes dismissal of fly-over country where God, guns and cash deals are the bogeymen gussied up with an appeal to an ignorant authority even as real retail adjusted for population shows we are still over 8% below the 2005 peak:

Off-the-books activity also helps explain a mystery about the current economy: even though the percentage of Americans officially working has dropped dramatically, and even though household income is still well below what it was in 2007, personal consumption is higher than it was before the recession, and retail sales have been growing briskly (despite a dip in March). Bernard Baumohl, an economist at the Economic Outlook Group, estimates that, based on historical patterns, current retail sales are actually what you’d expect if the unemployment rate were around five or six per cent, rather than the 7.6 per cent we’re stuck with. The difference, he argues, probably reflects workers migrating into the shadow economy. “It’s typical that during recessions people work on the side while collecting unemployment,” Baumohl told me. “But the severity of the recession and the profound weakness of this recovery may mean that a lot more people have entered the underground economy, and have had to stay there longer.”

It's pure fantasy that $2 trillion in income (!) didn't get reported to the IRS based on nominal numbers of less than, for example, $5 trillion in retail sales in 2012, all generated by suddenly sidelined people (!), when real retail adjusted for population growth and ex-gasoline is still over 8% below the 2005 high:

(See Doug Short's discussion, here.)

That's right. The patriotic core of the country is a bunch of dishonest tax-evaders who are robbing the government blind with their vibrant, dishonest cash economy! They don't even have bank accounts, the pikers!

How dare they?!

Real Retail Sales Still Remain Below The 2006 Peak

Real retail sales still remain below the December 1, 2006 peak of $180.016 billion. The latest report of real retail sales for November 1, 2012 puts them at $178.51 billion.

Graph and data here.

We still remain in a consumption depression nearly six years since the onset despite extending the Bush tax cuts for two years beyond their original expiration date, and despite the first ever emergency reductions to the payroll tax, rolled back 32% for both 2011 and 2012 from 6.2% of each paycheck to 4.2%:

"[F]or the economy as a whole the payroll tax cut amounted to about $112 billion in 2012 – or the equivalent of at least $300 for each person in the US," reports the Christian Science Monitor, here.

Given the 100% propensity to spend everything in a paycheck, the expiration of the payroll tax cut will remove that sum from current retail spending levels. And going back to the Clinton era tax rates in less than two weeks, on January 1, 2013, will mean transferring about $235 billion annually from taxpayers to federal coffers, according the Congressional Budget Office, as discussed here.

Together that's a theoretical annual hit to spending by the American people of nearly $350 billion.

Yet Democrats cry Forward! to these tax rates of the past despite the damage they are likely to cause.

We're not going to get over the hump that way.

Real Retail Sales Still Have Not Bested The 2006 Peak

Data through September 2012, here.

Retail Collapses in The Netherlands, Unsold Housing Inventory Nearing Spanish Levels

So says Ambrose Evans-Pritchard, here:

Dutch retail sales collapsed by 11pc in April, even worse than the 9.7pc drop in Spain. (Royal holidays cannot explain this). ...

This is not contagion from Greece or any such nonsense. It is the result of the eurozone's destructive policy mix. ...

The consequence of Holland’s accelerating downward slide may well be an anti-euro coalition in The Hague this Autumn.

I reported from Amsterdam in April that the Dutch property market is tipping into deeper slump, with the inventory of unsold homes nearing Spanish levels . . .: Rabobank said home prices have fallen 11pc from their peak in August 2008, or 15pc in real terms, leaving up to 500,000 people in negative equity. The stock of unsold properties has doubled to 221,000 since 2008, almost double the declared level in the US on a per-capita basis.

Consumers Increase Spending in 2011 From Savings and Social Security Tax Holiday

Net real retail spending looks set to come in up 2.9 percent in 2011 over 2010.

Per the data here from the Census.

Average monthly retail and food expenditures in 2010 came to $363 billion per month, or $4.4 trillion overall.

Through October 2011 average monthly retail and food expenditures are running at $389 billion per month, or $4.7 trillion annualized.

That's a 6.8 percent increase so far, or about $26 billion more per month.

Less inflation running at 3.9 percent, the net real increase appears to be 2.9 percent.

$billions monthly

Unfortunately, about $14 billion of the $26 billion nominal monthly increase could be attributed to a reprieve on Social Security taxation of 2 percentage points on employee compensation running at an annualized rate of $8.3 trillion as of October. That extra money in paychecks is simply being spent.

Where did the remaining $12 billion per month come from?

From savings.

The savings rate has plummeted since January, from a rate of 4.9 percent to 3.5 percent. In January we were saving nearly $47 billion per month, but now only $33 billion, a difference of $14 billion per month.

Add the pernicious work of inflation on top of all that, and the rosy scenario of increased consumer spending doesn't look so good after all, especially since incomes are stagnant to falling. Hours worked year over year are flat, and real average hourly earnings overall are down 1.6 percent, according to the BLS here.

When the Social Security tax holiday expires on December 31, there will be less money available to spend, automatically. Robbing from Social Security for such temporary gains is a gimmick, but don't underestimate the politicians' and the voters' eagerness to repeat it under these grim circumstances. They'll take the money, even if it means saving less, because they need it.

I'm Nominating This One For Blown Prediction of 2011

As seen here:

Retail consultancy Customer Growth Partners expects that American consumers have worked to put their finances in order and are ready to spend. Their forecast calls for holiday sales in the November to December period to rise 6.5 percent from last year to $554 billion.

That's twice consensus forecasts, which have put holiday sales growth between 2.5 percent to 3 percent. It also is the fastest pace for retail sales growth since 2004, when holiday sales rose 6.9 percent.

Why is this a crazy prediction? Because Whirlpool announced today that it is laying off 5,000 as consumers are unable to buy major appliances.

And because of this, reported here in the same place, also today:

The total compensation paid by employers in the third quarter rose by the smallest amount since at least 1982 as employees paid for a greater portion of their health care and companies continued to sit on their record hoards of cash. ...

Meanwhile, the savings rate plummeted to 3.6 percent, the lowest in four years, according to separate data released Friday from the Commerce Department. That’s down from 5.3 percent in June.

“Spending more when you’re taking home less and cutting into savings — That’s not the best recipe for stronger spending in the near term," Jonathan Basile, an economist for Credit Suisse, wrote in a note to clients.

Consumers remain under stress just to pay the bills, and are reducing savings to cope. That is not a recipe for a smashing holiday spending season.