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Impact of Three Rounds of Stimulus on Retail Spending Dollars in Pictures

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13 comments on Impact of Three Rounds of Stimulus on Retail Spending Dollars in Pictures

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Observations and Expectations

  • The overall spending jump and motor vehicle sales pre-Covid to now are not sustainable.  No more stimulus is coming.  
  • In September, the Federal unemployment benefits expire. 23 Republican states have already terminated benefits early. 
  • I expect some tax hikes even if minimal. 

Looking ahead, the fourth quarter and 2022 GDP and will be much weaker than most expect.

Mish

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Mike Shedlock

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13 Comments
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BJtalks
BJtalks
5 years ago
My observation is that a lot of the stimulus money went to Vegas and Sports Gambling.  This last quarter Vegas had the largest profit, Colorado noted that several billions were spent on sports gambling, ads are on the news and radio stations.  There are huge amounts of money not reflected in these charts, the difference between with automobiles and without automobiles.  Huge amounts of stimulus went to gambling.  Then buying homes, many families finally had a down payment for a new home. 
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Eddie_T
Eddie_T
5 years ago
I’m wondering if we will get some kind of correction in gold related to the Fed today. At the moment gold is being bid up, but I think there is a fair possibility there might be one more attempt to run the stops on the longs. Gold is technically looking very good for a big move. It’s been taken all the way down to the 200 day moving average. 
The dollar is floating around the 90.5 level. It got above the trend line yesterday but it didn’t hold. No signal there, as of yet.
Stocks are very stretched. A more significant correction there looks more likely. Not sure how gold will move if stocks take a hit. Big hits to stocks will take gold down, of course. I doubt we get that kind of correction (if any).  Just a bit of a reversion……the pundits are predicting a dovish announcement.
I am looking to add to my SLV trade.
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Casual_Observer
Casual_Observer
5 years ago
This is a snoozer. GDP was weak before covid. The TCJA didnt really do much beyond pump up stock market buybacks. We will resume the meager productivity  growth we had for much of the last two decades.  The economy will soon need water to function soon. It is going to be an eye opening summer as stagflation takes hold.  No underlying problems have been addressed because of the intransigence of the Republican party and inability for Democrats to use their power when they do have it. Growth will not work this time.around for the American economy that is on its last wheels as the climate crisis hits in earnest.
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amigator
amigator
5 years ago
Reply to  Casual_Observer
Good stuff. But republican or democrat there is essentially no difference in spending money. Maybe different areas but effect is the same on our future. It will take a little while to digest and for banks to fully multiple out the last stimulus.
The next stimulus package will be more unbelievable than the last. It will come there is really no choice now at least for the status quo. They will just need an excuse of some kind and they are good at finding those.
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RonJ
RonJ
5 years ago
Reply to  Casual_Observer
There is no climate crisis. It is a political narrative. Everything about climate is painted as gloom and doom. Turns out the Polar Bears are not facing extinction. Turns out Obama bought beach front property. We are being scammed for political purposes.
I don’t see one political elitist drastically cutting back on their carbon usage. It is all business as usual for them.
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BJtalks
BJtalks
5 years ago
Reply to  RonJ
This is a hard one, the west is in a super dry state that can affect farming and will be seen in the market.  The way the Green Movement is approaching this problem is all wrong.  I believe in baby steps,  first make it more expensive to drive trucks, secondly the biggest threat is overpopulation and not just cars.  The forests are burning, not just because of the unusual heat and dryness, since 80% are human caused, there are way too many people.  Its not the 50s anymore.  High rise apartments going up every where, and those people need water to shower and clean.  Well, there will shortly be no water left. 
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RonJ
RonJ
4 years ago
Reply to  BJtalks
Apparently, the CA state water board is flushing 40% of the water exiting Lake Oroville, out to sea without people benefitting from it. The lake is now down some 50%, when it should be much higher at this point into the drought, when it was brimming over after the last heavy rain year. L.A. adjacent, there was no drought warning in my last utility bill. No urgency to conserve water. Mismanagement of resources.
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Bay-Brit
Bay-Brit
5 years ago
If people are able to purchase more fuel efficient cars and more fuel efficient cars enter the secondary market, then all things being equal will they not have more disposable income?
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Casual_Observer
Casual_Observer
5 years ago
Reply to  Bay-Brit

If you mean by fuel efficient, hybrid or no gas engines, then things aren’t equal. Prices of hybrid vehicles are still about 10k to 15k more than the same non hybrid model.

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JG1170
JG1170
4 years ago
Reply to  Casual_Observer
Thank you. Although I think the 10k premium is a bit overstated since he’s including the secondary market. Maybe 6k-12k for older examples. Then there’s the fact that as vehicles become more fuel efficient, the price of gas keeps moving up to compensate for the losses. So the little guy can never catch a break in corruptoland.
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ThaomasH
ThaomasH
5 years ago
I think it is a mistake to characterize the ARA as “stimulus.”  It did not add demand that the Fed could not have created and would have created even without ARA.  Are redistributed income to lower and middle income people.

Please “hope” for much greater than minimal tax creases.  Structural deficits are not good for long term growth.  

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Mish
Mish
5 years ago
Reply to  ThaomasH
What would be good fore long-term growth are
1. Reduced Govt spending
2. Tariff elimination
3. Balanced budget 
4. Ending the Fed for market set rates
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whirlaway
whirlaway
5 years ago
Reply to  Mish
#1 will happen only to the extent that benefits to average Americans would be cut.  It will NEVER EVER lead to less spending on wars.   On the contrary, it will keep on increasing year after year after year.  
#2 will only mean US will do it.  Other countries won’t.   The result is more exporting of jobs and more impoverishment. 
#3 was done in the late 1990s, but only by gutting welfare programs for the poor; the welfare programs for the rich kept growing and growing.  
#4 will never happen because it is the Fed that creates money that goes into the pockets of the Bezos and the Musks of the world.   And since the rich and the corporations own the government, it is silly to expect the government to ever end the Fed and even sillier to blame the government for not doing it.
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