Caution. Every time I suggested consumers may throw in the towel, it didn’t happen. Counter caution, real (inflation-adjusted) spending is negative year-over year for 12 out of the last 17 months.
Please consider the Advance Retail and Food Services Sales report for April 2024.
Retail Sales Key Points
- Advance Estimates of U.S. Retail and Food Services Advance sales for April 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $705.2 billion, virtually unchanged from the previous month, but up 3.0 percent above April 2023.
- Total sales for the February 2024 through April 2024 period were up 3.0 percent from the same period a year ago.
- The February 2024 to March 2024 percent change was revised from up 0.7 percent to up 0.6 percent.
- Retail trade sales were virtually unchanged om March 2024, but up 2.7 percent above last year.
- Nonstore retailers were up 7.5 percent from last year, while food services and drinking places were up 5.5 percent from April 2023.
The key phrase is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”. Adjusted for inflation (real) sales are much lower than three years ago.
Real Retail Sales Detail Millions of Dollars
Real retail sales are down 3.6 percent from April of 2021, three years ago.
But if we ignore the spike peak, real sales have been flat since July of 2021. Every time it appears customers were about to throw in the towel, they instead opened their wallets, or charge cards.
This is not strong spending as typically portrayed by mainstream media.
Advance Retail Sales Select Categories
The clear winner since the pandemic is nonstore retailers, led by Amazon.
In 2015, nonstore sales topped gas station sales and by early 2020 topped everything but motor vehicles and parts.
Eventually, nonstore sales will top motor vehicle sales.
Real vs Nominal Advance Retail Sales Percent Change From Year Ago
On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.
This is sign the vaunted consumer is much less than portrayed.
Is there another consumer spending surge coming or not?
Real Advance Retail Sales Percent Change Month-Over-Month
We have seen some big swings this year especially in motor vehicles and nonstore retailers.
This month, real sales overall fell 0.3 percent with nonstore sales down 1.5 percent and motor vehicles down 1.1 percent.
CPI Up 0.3 Percent With Rent Still Rising Steeply
Rent rose another 0.4 percent in April. Food and beverages were flat with food at home declining but food away from home rising.
for discussion, please see CPI Up 0.3 Percent With Rent Still Rising Steeply, Food a Bright Spot
If the CPI weakens more than sales, real sales will go up.
Nominal retail sales were flat this month but real sales fell 0.3 percent because the CPI rose 0.3 percent.
Eventually, consumer spending will give way. Whether the time is now remains to be seen.
A friend with a large landscaping business mentioned he’s had to nearly double salaries in a 4 yr period in order to retain workers.
Obviously this is reflected in his project quotes… he says the clients continue to accept the higher prices…
He assumes this can go on forever….
It can’t – at some point the market will say no mas…. projects will be downsized… or shelved completely.
Then the pain will hit — too many contractors chasing too little work… companies will fold… layoffs will increase…
And we’ll head into the vortex of a deflationary death spiral… with the central banks powerless to once again ‘float all boats’ with cheap cash — cuz that would trigger hyper inflation now.
We are f789ed. Lots of people know that… what we don’t know is when this will implode – and what the trigger will be.
I suspect the inflation will continue its relentless climb to a point where things just snap.
The numbers will continue to get worse monthly as people max out their credit cards and/or creditors close accounts for delinquencies. People have less disposable income after paying for necessities (mortgage, rent, food, utilities). Except for food most necessities can’t be charged.
As discretionary spending is destroyed by higher insurance premiums… higher costs of food and services and rent etc….
The economy will shrink cuz people cannot afford much in the way of discretionary purchases…
A shrinking economy is a frightening thing… especially when the central banks are powerless to reverse the shrinkage cuz they’ve used up all their ammo
Dow 40k will propel those living off stock market income higher. These numbers don’t show up in job statistics or even most income statistics that use payroll or other job means to track things.
There is definite spending cutting going on but as people get wealthier via the stock market, the wealth effect can propel the real economy.
“Dow 40k will propel those living off stock market income higher.”
But don’t forget the $120.2b/month in free money for the socialist class. It’s best to be an asset class member then if that fails be a socialist to survive in this economy.
“It’s best to be an asset class member then if that fails be a socialist…”
As if the two differed in _any_ meaningful way, at all, whatsoever….
But yes: You are right. Welfare checks handed out by The Fed, tend to larger than those handed out by other state organs. While those attempting to get by, by some other means than just collecting welfare from either/any state organ, are indeed worst off of all. Since they are the ones robbed, via both debasement AND their tax bill; to fund all the useless, negative-value-add welfare collecting leeching class members. From Warren Buffet to some guy under a bridge; ranked in declining order of lifetime welfare collected.
Venezuela’s stock market a few years ago showed how a rising stock market isn’t a sign of a healthy economy, but rather a sign of inflation.
Someone has to buy the stock position when someone cashes out. For every seller who gains a cash position, there is a buyer loosing a cash position.
Could be freshly minted, I mean issued stock.
I run a destination resort. Guests are opting out of using our chef for their meals. About a 30 % savings but you have to schlup your own food, prepare and then clean up. Vacation lite.
This seems like very good news for inflation. The stock and bond markets loved it.
Pah, if only there was inflation, but there isn’t any, it’s all deflation.
REAL EARNINGS SUMMARY
released Wednesday, May 15, 2024
US Bureau of Labor Statistics
“Real average hourly earnings for all employees decreased 0.2 percent from March to April, seasonally adjusted, the US Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings combined with an increase of 0.3 percent in the consumer Price Index for All Urban Consumers (CPI-U).”
This is the mighty Biden economy real earnings
April 24 -0.2
Mar 24 0.0
Feb 24 -0.3
Jan 24 0.2
Dec 23 0.1
Nov 23 0.2
Oct 23 0.2
Sep 23 0.0
Aug 23 -0.4
Jul 23 0.2
Jun 23 0.3
May 23 0.2
April 23 0.0
People who work are going at snails pace in growth. It feels slow because it is slow.
Substituting debt for nonexistent growth has a Limit.
To put this in perspective. BLS also includes in data real average weekly earnings
table A-1. current and real (constant 1982-1984 dollars) earnings for all employees on private nonfarm payrolls, seasonally adjusted.
Apr. 2023 $378.50
Feb 2024 $381.09
Mar. 2024 $382.09
Apr. 2024 $380.56
so One year down the road and weekly real earnings have increased
$380.56 Apr 2024
-378.50 Apr 2023
———-
2.06 That’s right in constant dollars average worker has grown by 2 dollars and 6 cents over one Year
This is a scorching, sizzling economy by Biden standards.
A meal for two at McDonalds has been gained by earnings in one year.
Really rocking.
Private service debt ratios are not really at GFC levels, if you want to see real under-pressure economies, look no further than Canada, and then Australia, Korea, Sweden, to see countries that are buckling under it all.
Outlook is very weak as there are no quick fixes for this.
Collapsing buying power from inflation coupled with debt that is difficult at best just to service implies there is no resilience for consumers to fall back upon.
Any unexpected shock and consumption will tank.
I suspect it will come and quite soon from layoffs as manufacturing is running thru back orders and new orders not keeping up with pace of production. A slowdown in manufacturing is going to ripple in a big way.
All the talk of new Tariffs suggests panic in high places.
add:
Am not pushing against your statements about there is no inflation.
Just easier for me to relate and call higher prices as considered inflation, whilst falling prices deflation.
Hard to make an intellectual shift in thought based upon other criteria.
I believe we both tend to be on same page as to outcome.
I wonder if there is a demographic component to declining retail sales. People in their 30s 40s and 50s spend the most. As the population ages the per capita spending will naturally go down. Seniors spend a lot more on health care but that’s not in retail sales.
good points. And what about in a presidential election year?
The Dow reached : 40,000. QQQ [1W] is celebrating Bar Mitzva. From now on
SPY, DIA and QQQ : all 3 behave like stupid teenagers.
On a year-over-year basis, real retail sales have been negative 12 out of the last 15 months.
On a “per-capita” basis, real retail sales would be negative for 15 of the last 15 months. And DEEPLY negative.
Biden to forgive credit card debt.
Biden to bail out Jeff Green and the other fools who bought Teslas and are now driving massively devalued coal powered jalopies hahaha
Oh come on people, that was funny.
If Xi Jinping wasn’t having such a terrible time with his economy, Biden would be much more exposed to the effects of his incompetence and incontinence.
Is there a way to see how much credit they have left on their cards?
There is a Fed for that.
https://www.newyorkfed.org/microeconomics/topics/credit-cards-auto-loans
There was a good article from NYT on how credit reporting agencies are NOT tracking the “buy now, pay later” creditors so there is now a whole new set of lenders/loans floating around out there not falling under traditional reporting methodologies.
https://www.nytimes.com/2024/04/23/business/economy/buy-now-pay-later-credit.html
“The loans typically are not reported on consumers’ credit reports, however, or reflected in their credit scores. That has stoked concerns that users might be taking on an outsize amount of debt that is invisible to both lenders and financial regulators.
So in February, when Apple announced it would start reporting loans made through its Apple Pay Later program to Experian, one of the three major U.S. credit bureaus, it looked like a watershed moment for the fast-growing “buy now, pay later” category.”
I think this is what’s been keeping the economy afloat, alternative loans and no one knows the limits of this debt bomb.
In other news, saw that Warren Buffett picked up shares of Chubb….heh, he’s found the same money train I have. …..$……$ Got insurance stock?
This was reported several months back. While they have caught up in reporting a true story, in general, the NYT is a rag and a constant source of government sponsored disinformation.
The majority of people using bnpl probably already have delinquent debt showing on credit reports.
Please send a link to where you get this information.
Mish, I would love to read an article on “SEASONAL ADJUSTMENTS” and all other fabrications.
Ultimately, there will be ALL JUST SEASONAL NUMBERS, fabricated to fit the narratives.
The weather will be seasonally adjusted for full moons or not.
Your Grandchildren’s lives (Births) are about to be fabricated to include Condom adjustments.
LMFAO. Good one. Come on Mish, that is funny
My VERY old in-laws eat McDonalds. The local store sells rancid-oil Fries so I will not touch them.
They used to buy 10 Chicken McNuggets for (guessing) well under $10.
NOW, they are promoting 3 McSHIT-NUGGETS for $5.
We are in a hyper inflation economy similar to Argentina of yesteryear. Skilled work and businesses with pricing power are rewarded with compensation that keeps pace with inflation. The demand for goods and services from those survivors does not flag. The unskilled, minimum wage, and those receiving fixed government income transfer payments have their pay packages shrunk. One symptom is rising crime in the inner cities. Another is labor strife from the unskilled low value workers such as auto assemblers, burger flippers, and baristas. Ultimately US labor rates and US standard of living must settle to world levels. Americans are not special and deserve no better than the teeming masses of Egypt, sub Sahara Africa, South America, or Asia. Poverty is the natural human condition. Capitalism allows people to rise from poverty by contributing something extra to society and making themselves valuable sellers of a skilled trade or service. Successful cultures honor education, creativity, and productive endeavor that serves mankind. Unsuccessful cultures like Russia and Madrid Spain teach conquest and thievery from other cultures and those people who do produce wealth.
Yes crime and inflation are positively correlated. This should be talked about more. Another reason why inflation should be job one for the government
“Another reason why inflation should be job one for the government”
It is. The government creates the inflation. They could stop any time they wish. But history shows they always choose inflation over the alternatives.
There’s no inflation; there’s no money printing; there is, massive illegal immigration, sanctions on oil, netzero taxes, and all following on from pandemic-hoax lockdown supply chain disruption.
People who throw around the words “Unskilled Worker” are the first to complain when something isn’t done right. If something is unskilled than any level of performance should be acceptable. It is usually insecure, specalized, singular talented people who are diminutive about people who do things they can’t or are unable to do themselves. Multi talented people recognize the important nuisances of every task at hand.
No we’re not. There is no inflation. Price rises are not inflation. Repeat until learned.
Inflation needs increasing money supply through commercial loans, but the opposite is happening. What there is, is deflation, masked by policies that engineer fake scarcity/demand.
The inflationary depression just keeps rolling right along. They killed the goose that lays the golden eggs. Now they are just printing them.
there is no printing; there is no inflation.
money supply is contracting; global trade is contracting.
there is credit crunch and deflation and deglobalisation.
Exactly.
There is no inflation.
Everything just costs more.
Yes, the time is now IMO. If one looks locally, things are getting tight all over.
How about that gold bull run? The train has left the station, newer highs are on the way.
Do we need retail sales when we have the Gubmint building weapons and printing money out of thin air and spend it with no consequences? Ok, so maybe its inflationary but if we don’t need retail sales we shouldn’t worry about inflation.
there is no printing, they issue and sell debt, and flood the market with debt, lowering the price of debt, increasing the yield on debt, increasing interest rates. there’s no inflation, there is deflation. price rises are not inflation. more debt issuance pushes rates up and devours the national budget.
It’s those greedy grocery stores jacking up prices with their gaudy 1% margin.