The answer to the question appears to be yes, starting October of 2023. Six pictures of real vs nominal advance retail sales tell the story. 
Every month the commerce department reports Advance Retail Sales.
Advance estimates of U.S. retail and food services sales for February 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $700.7 billion, up 0.6 percent from the previous month, and up 1.5 percent above February 2023. Total sales for the December 2023 through February 2024 period were up 2.1 percent from the same period a year ago. The December 2023 to January 2024 percent change was revised from down 0.8 percent to down 1.1 percent.
I highlighted the key line “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
GDP depends on real (inflation adjusted) sales, not nominal sales. Also note the negative revision. “The December 2023 to January 2024 percent change was revised from down 0.8 percent to down 1.1 percent.”
Real vs Nominal Detail Broad Brush Notes
- Nominal sales peaked in September of 2023 at 705,304. It’s now .65 percent to 700,727. But it’s the real calculation that matters
- Real sales peaked in May of 2022 at 234,066 but strongly recovered from a big dip. The more recent high was September of 2023 at 229,525. It’s now down 1.85 percent in the last 5 months to 225,275.
Real vs Nominal Retail Sales Since 1992
Real vs Nominal Retail Sales Percent Change From Year Ago 2024-02
In the past 16 months, year-over-year real sales were only positive 4 months.
Real vs Nominal Retail Sales Percent Change From Month Ago
In the last 22 months, real month-over-month retail sales were above zero only 8 times.
Nominal Advance Retail Sales Percent Change Month-Over-Month Breakdown
In nominal terms, sales look pretty good except for January of 2024. But that’s a mirage.
Real Advance Retail Sales Percent Change Month-Over-Month Breakdown
Real sales are very weak dating to October of 2023.
Mentally average motor vehicles for the last two months for a better mental image. Motor vehicle sales are recorded when the manufacturer ships cars to the dealer, not when the consumer buys them.
Even nonstore sales (think Amazon) are struggling. Nonstore sales have been a big ping-pong starting August of 2023: down 0.7, up 0.9, down 0.4, up 0.2, up 1.0, down 0.6, down 0.5. That’s down 4 months and up 3 months. The total up months add to 2.1 and the total down months add to -2.2.
Economic stress is showing, especially in younger age groups.
Credit Card and Auto Delinquencies Soar
Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.
Record High Credit Card Debt
Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.
For nearly all age groups, serious delinquencies are the highest since 2011.
Auto Loan Delinquencies
Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.
For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39
Generational Homeownership Rates
The above chart is from the Apartment List’s 2023 Millennial Homeownership Report
Those struggling with rent are more likely to be Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.
The same age groups struggling with credit card and auto delinquencies.
On Average Everything is Great
Average it up, and things look pretty good. This is why we have seen countless stories attempting to explain why people should be happy.
Krugman Blames Partisanship
OK, there is a fair amount of partisanship in the polls.
However, Biden isn’t struggling from partisanship alone. If that was the reason, Biden would not be polling so miserably with Democrats in general, blacks, and younger voters.
This allegedly booming economy left behind the renters and everyone under the age of 40 struggling to make ends meet.
Many Are Addicted to “Buy Now, Pay Later” Plans
Buy Now Pay Later, BNPL, plans are increasingly popular. It’s another sign of consumer credit stress.
For discussion, please see Many Are Addicted to “Buy Now, Pay Later” Plans, It’s a Big Trap
The study did not break things down by home owners vs renters, but I strongly suspect most of the BNPL use is by renters.
What About Jobs?
Another seemingly strong jobs headline falls apart on closer scrutiny. The massive divergence between jobs and employment continued into February.
Payrolls vs Employment Gains Since March 2023
- Nonfarm Payrolls: 2,602,000
- Employment Level: +144,000
- Full Time Employment: -284,000
For more details of the weakening labor markets, please see Jobs Up 275,000 Employment Down 184,000
CPI Hot Again
For discussion of the CPI inflation data for February, please see CPI Hot Again, Rent Up at Least 0.4 Percent for 30 Straight Months
Also note the Producer Price Index (PPI) Much Hotter Than Expected in February
Major Economic Cracks
There are economic cracks in spending, cracks in employment, and cracks in delinquencies.
But there are no cracks in the CPI. It’s coming down much slower than expected. And the PPI appears to have bottomed.
Add it up: Inflation + Recession = Stagflation.
How PCE and CPI data Differ
CPI only counts expenses directly paid by the consumer.
PCE also counts expenses paid on behalf of consumers
The best example of the latter is health care where corporations pay some of the costs on behalf of consumers.
They are both flawed in that inflation matters, not just consumer inflation. Neither directly counts home prices. Ignoring asset bubbles, especially housing was a major problem in 2004-2006 and again now.
The problem now is simple to explain but nearly impossible to fix:
The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate
link to mishtalk.com
I mean – I see it with my own children. They think they should be living like Kardahians, traveling internationally, buying new cars. My 22 year old had money to go on vacation, and then was late on her rent and car payment the next month due to one unexpected bill. Granted, my mortgage is very low, at around $1400 a month (including taxes and insurance costs we don’t escrow) for a modest 2500 sq ft home. We drive older, inexpensive cars. We don’t spend a lot on new clothes or designer anything. I like to think we are thrifty.
My daughter and her husband rent a house in this market that is less than 1500 sq ft, and they pay over $2300/month. They both drive brand new cars with large payments. They only wear name brand clothes. They make good money together, but they are very materialistic. It’s one thing if you can afford it. It’s quite another when you’re spending your rent money on luxuries.
mine were living well until the company folded. won’t let them turn me into “snowplow parent”. assistance coming with strict terms.
just hope they learn from it the way I survived the 70’s
It looks as though the consumer may not have had a choice. Perhaps the better question is:
“Has the US Consumer Been Forced, to Finally Wave the White Flag on Spending”?
I think as long as people were/are getting free money, for whatever reason, they will eagerly accept and spend it. All of it, each and every time.
The much larger issue to me, is that it’s all been coming from the Taxpayers. That well has run dry, but these folks receiving all this free money, are going to be asking/demanding where is it? That’s when you will see the real problems in the way of a roof and food and safety. Up until that time comes, it has all been handed to them. Now what?
The spending always adjust itself, by the general rule “You always run out of other peoples money” and that is happening right now.
What can’t continue won’t, and what can’t be paid for won’t be. “Economics-101”
Consumers are learning the art of substitution. The cost of food, fuel, home, electricity, heat, and medical care must replace something else they thought they needed. Retail must keep inventory locked behind the counter. Use it up. Wear it out. Make it do,or do without.
Dollar General mgr works hard with a skeleton crew. Aldi mgr and his crew work hard to replenish merchandise, clean the store and fix the mess twice a day.
Walmart ladies hang together and chat with each other near the self service area. When there is a problem they fix it. They never coach customers on how to avoid problems. If they do WMT can eliminate their jobs. Aldi self service software is better than WMT and the supermarkets. They keep it simple, to begin with, with few options. In certain supermarkets the software scream at the customers, make them look stupid.
According to Vanguard, 401K hardship withdrawals rose to over 3.5%, compared to about 2% prior to the pandemic, which is the highest since Vanguard started tracking such data in 2004. Reported on Fox Business. Saw on J Bravo Youtube last nite.
“About 40% of individuals who dipped into their 401(K) last year did so to avoid foreclosure – up from about 36% in 2022, according to the report.”
Krugman is the poster child for bipartisanship. Enough!
Yes. Forget about all these stylized, seasonalized and revised government reports and look at real companies like AAPL. Apple sales were down $11 billion last year. Dollar stores and many other consumer facing stores are struggling as well.
After crushing the Scottish insurrection GB crushed the Patriot insurrection. Since
France lost Canada they had no issues in N. America. Spain had. Spain and France wanted to invade England , but the British navy raided Le Havre. Spain planned to
invade Portugal, her main rival in S.America, but GB was Portugal ally. France was not ready for a new European war. GB which owned FL and few sugar islands was threatening Spain’s northern colonies. GB ruled the waves, but had no friends in Europe, She was totally isolated on her island. France was the dominating force in Europe. France protected Sweden, Poland and the Ottoman empire from territorial claims by Russia. Catherine the Great wanted to return Constantinople to Christianity. She added Crimea and few Muslim states in the Caucasus region. Friedrich II split Poland to build a security zone.
To keep the peace in Europe France and Spain decided to supply the Patriot with weapons, recycled weapons, to keep the British busy. Things changed after Saratoga.
Speaking of Utah. Earlier this week on a weekday evening I rented a car at the SLC airport. I was the only customer. All major rental companies have counters. And I was the only customer for any of them.
I don’t know what to make of that but it is not what I expected.
utah visits are very much event driven. trade shows, summer for parks, church conferences. rest of the time you can fire off a cannon down main (or state) street and probably not touch a soul in the smaller towns
“Credit card debt rose to a new record high…”
Typical APR is often at 29%. This legally sanctioned economic rape, albeit self-inflicted. But still…
While the total $ number was going up, actual sales were falling, less stuff bought. Inflation.
We are plummeting into a full blown inflationary depression.
Assets are still propped up, but the carnage is plain to see and is getting much worse fast.
ABSOLUTELY 100% yes
Just spent a few weeks in Florida. One day we got stuck for a bit on a main street that was 3 lanes wide and the far right one was stopped for miles. As we made our way further along, we slowed to see what was happening (thought it was a big funeral). Turns out it was a large multi-site food bank and this particular location was a church. Found out it was like this every Tuesday all day and the food bank said Covid volume was record breaking but the last few months has been massive and twice as large. They estimate a 25% to 40% higher volume of people lately. The cars lined up ranged from older damaged models to almost new Mercedes S500s, Teslas, Cayans and every other car in between
With real inflation back over 8% and the criminal FED unwilling to fight it because they ONLY serve wall street, this will only get worse
100% true
Spent 2 years traveling all over the US.
It’s the Great Depression II if you look under the covers.
Dead towns everywhere.
Zero entrepreneurial spirit.
Meth has hollowed out the hinterlands.
Food banks are the soup kitchens of yore and they are EVERYWHERE.
Us is in bad shape.
Utah is still very good.
Wyoming is very meth land.
Des Moines is like China very clean and nice – old America lives in Des Moines.
Rural farm towns in Illinois are really nice.
Farm consolidation ruined the small towns in Iowa – but they still shine in Illinois.
Denver is a nightmare.
California feels insane and diseased.
Portland Or has to be seen to be believed – Astonishing degeneracy.
Boise is entrepreneurial feeling.
The rest of Idaho hasn’t changed much.
South Dakota is shit – ignorant meth heads.
Want to see the true state of the US go to Omaha – Unbelievable UNBELIEVABLE
It’s over here – put a fork in it.
Omaha is the nicest and best midsized city in America. You can thank Warren Buffett for creating the most millionaires per capita of any city. Omaha is not a reflection of the rest of the United States.
Ah the Black Pill. You see what you want to see. Are things great? Nope, but they aren’t bottom of the barrel awful either. Things can always be much worse.
A Black Pilled world view is really bizarre in my view. Zero hope. At its core the Black Pill is nihilistic. It’s like Black Pilled folks have given all thier personal power and drive to someone else (usually some political savior, opposing devil, or some online pundit). Your life and world view are what you make of it. Does it feel good seeing the negative all the time? There are positives all over if you simply take off the dark cloud covered glasses.
Here I’ll give you a few positives that I can see. The climate and DEI stuff appear to be in retreat. The progressive agenda also appears to be in retreat.
In the wake of the shooting during the Kansas City Super Bowl celebration, a map was posted showing a number of “no go” sections of the city.
Units sales for key product categories are more useful than using CPI to adjust nominal dollar-volume sales. Retail inflation differs from CPI, which includes a lot of extra stuff (housing, rents, non-retail services…). Goods inflation impacts retail sales more and has been running below the CPI trend recently. Using a full-CPI adjustment on retail sales obscures rather than illuminates the question of whether overall retail demand is actually lower in past 6 months, or retail prices have been more stable.
Still very awkward the retail sales adjusted for CPI have been flat-to-down for 3 years.
Distribution effects also matter – inflation is biting hardest on the lower income end. So is Dollar Tree a canary-in-the-coalmine, or just mismanagement?
We’ll be learning more from earnings calls soon!
Paul Krugman….”When my analysis is flawed, I will blame Republicans”
His face will be imprinted on a $35,000,000,000,000 coin to save us all!
I just paid off huge cc bill(over $7k last month)
already this week have spent more than last month
gotta another 3k to spend next week also
gonna be lean month
not to mention the $3k I just paid in property insurance premiums
another $2k waiting for april
So, you are doing your bit to stimulate the economy. Congratulations.
I’ve been working more to swallow this inflation. At least I can tread water in this economy but I don’t like working all the damn time.
Thank you. I really don’t see where this ends. Each month by bills to maintain footing, not increase, not going down, just treading water on things that MUST BE BOUGHT like phone, internet, rent, food, insurance, energy but there go up 5% every month. I can’t NOT PAY any of these. So I go into debt. Some day this year it will end. Then somebody will not get paid.
I’d be curious to see if the analysis holds if adjusted using PCE rather than CPI. Since PCE has a lower housingSince PCE has run lower than CPI, the slowing trend should still be intact but some of the negative signs would disappear.
How PCE and CPI data Differ
CPI only counts expenses directly paid by the consumer.
PCE also counts expenses paid on behalf of consumers
The best example of the latter is health care where corporations pay some of the costs on behalf of consumers.
They are both flawed in that inflation matters, not just consumer inflation. Neither directly counts home prices. Ignoring asset bubbles, especially housing was a major problem in 2004-2006 and again now.
The problem now is simple to explain but nearly impossible to fix:
The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate
link to mishtalk.com
Understood, but as imperfect as it is, my gut is that it would correlate more closely to the inflation rate on consumer goods and services. Nothing is perfect. I think using CPI biases it unnecessarily to producing negative signs, though the trend likely still holds.
This is all good stuff and tracks with my simple method of tracking sales. Mine works pretty well compared to analyzing FRED data, although it’s not as empirical just observation driven. I run an eBay store that sells new items, mainly collectibles. These items are sensitive to economic conditions and respond to changes in buying habits fairly quickly. I’ve seen a definite change in habits since the end of summer 2022 and the downward trend continues if not accelerating.