If someone tell you the consumer is strong, please have them read this post. The strong consumer is all a mirage of inflation.
The Bloomberg Econoday consensus expected retail sales would advance by 0.3 percent in May.
Instead, the Commerce Department reported 0.1 percent and downgraded April by 0.2 percentage points to -0.2 percent.
Advance Retail Sales Key Points
- Advance Estimates of U.S. Retail and Food Services Advance estimates for May 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $703.1 billion, up 0.1 percent (0.4 percent) from the previous month, and up 2.3 percent (0.5 percent) above May 2023.
- The March 2024 to April 2024 percent change was revised from virtually unchanged (±0.4 percent) to down 0.2 percent (±0.2 percent).
- Total sales for the March 2024 through May 2024 period were up 2.9 percent (±0.5 percent) from the same period a year ago.
- Retail trade sales were up 0.2 percent (0.4 percent) from April 2024, and up 2.0 percent (0.5 percent) above last year.
- Nonstore retailers were up 6.8 percent (1.4 percent) from last year, while food services and drinking places were up 3.8 percent (2.3 percent) from May 2023.
Mirage of Inflation
The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
It’s real (inflation-adjusted) sales that drive GDP. My inflation-adjusted charts show the vaunted US consumer is nothing more than a mirage of inflation. Nominal spending looks strong, but real spending isn’t.
Real Retail Sales Detail
That’s not exactly a paradigm of consumer spending strength.
Real vs Nominal Retail Sales Percent Change From Year Ago
Real retail sales are negative vs a year ago in 13 out of the last 18 months.
If someone tell you the consumer is strong, please have them read this post. It’s all a mirage of inflation.
Why Is Spending Weak?
Spending is weak because consumers are tapped out. Rent is up at least 0.4 percent for 33 consecutive months draining everyone struggling month-to-month.
Pandemic savings are wiped out.
On June 13, I noted Initial Unemployment Claims Jump the Most Since August 2023
Many of us do not believe the allegedly strong jobs market.
Payrolls Rise 272,000 Employment Drop 408,000
The data is confusing and conflicting in many ways.
For discussion, please see Another Bizarro Jobs Report – Payrolls Rise 272,000 Employment Drop 408,000
Nonfarm Payrolls vs Employment Gains Since May 2023
- Nonfarm Payrolls: 2,756,000
- Employment Level: +376,000
- Full-Time Employment: -1,163,000
In the last year, jobs are up 2.8 million while full-time employment is down 1.2 million
Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun
Unemployment is rising and job openings have crashed. It looks recessionary. Let’s investigate with a series of pictures.
For discussion please see Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun
In countries outside of the US there is no such thing as a long term fixed mortgage rate…. so people who took a 2 or 3 yr fixed rate are now in deep shit as they reset from 3ish% to 7ish%….
They are pulling in the oars and re-allocating the budget for meals out, holidays, and buying stuff to paying the mortgage.
Similar situation with renters.
Unless the central banks can refloat the ship with a another huge wave of stimulus… the ship will continue to take on water … and sink. Me thinks throwing cheap plentiful $$$ at this cannot happen… it will only make the situation (inflation) much worse….
As for the ‘confusing jobs market’… when is someone gonna have the balls to explain why there continue to be loads of jobs being created…. because loads of working age workers have been murdered or maimed by the Covid vaccines?
I have posted the data FROM THE US GOVERNMENT that shows both excess deaths and disabilities are through the roof….
The May US BLS Disability numbers are in.
The US population 16 & Over has been rising again every month since January and sits less than 100k from new all time high.
The Civilian Labor Force 16 & Over went to a slight new all time high.
This trend is going in the wrong direction 4 years after the pandemic & furthermore the US civilian labor force which should be healthier than the general US population is making a new high.
See the chart https://t.me/EdwardDowdReal/824
There is NO confusion… there are only the facts.
But of course all the analysts are Vaxxed… and they Vaxxed their children … so the very last thing they will do is acknowledge that most of the jobs are being created by The Vax…. that would cause then to lose their minds…
Cuz they will then accept that they – or someone in their family — is next
The biggest fisaco in the history of the USA, possibly the world.
I honestly feel sorry for you
Save your tears for the billions of folks who injected multiple shots of the Covid Vaccines… who are dying from heart attacks, strokes, blood clots etc…
Notice all the people with cancer? A Vaxxer the other day said she knows one family that has 3 members with terminal cancer (two are under 40! One has two types of cancer!!!).
Operation Warp Speed is to blame… no long term testing for side effects… there is a reason it takes 10 years+ to test a vaccine…
Now we are a couple of years in … and starting to see the side effects.
Every Vaxxer is a ticking time bomb…. did you see the NFL player having a seizure and heart attack last week? Recall Bronny James the college hoopster son of Lebron … having a heart attack last year… you could be next.. or your kid… or your wife….
No need to feel sorry for me… I am incredibly healthy… I exercise daily.. eat ZERO processed food or sugar… no seed oils… don’t smoke … drink very minimally… eat mostly organic foods…
Oh and I didn’t take The Vax…. cuz I don’t take stuff that is not properly tested.
And I had covid… it resembled a cold … or a mild flu… a nothing burger
I wish you luck. Tick Tock….
Cut the baloney. Massive numbers of people are RETIRING every single day. Many of those people are in trades or jobs that the current generation doesn’t want. There’s also a TON of small business owners that are retiring and their kids do NOT want to run those boring businesses.
Lots of jobs need filled but many are not awesome careers.
Lots of retirees need medical care and or support because they’re getting too old or feeble to do stuff for themselves.
This isn’t rocket science and has ZERO to do with vaccines. Get a grip.
Yes but there are also massive excess deaths and disabilities in working age people….
That is FACT.
And that is why the job market appears robust… when it is NOT.
The May US BLS Disability numbers are in.
The US population 16 & Over has been rising again every month since January and sits less than 100k from new all time high.
The Civilian Labor Force 16 & Over went to a slight new all time high.
This trend is going in the wrong direction 4 years after the pandemic & furthermore the US civilian labor force which should be healthier than the general US population is making a new high.
Click the link for the chart provided by The US Government
https://t.me/EdwardDowdReal/824?single
The Numbers Don’t Lie: Excess Deaths—Ed Dowd
In this interview, four areas of concerning data are highlighted:
Actuaries’ tables from US life insurance companies
British National Health Service sickness absence rates
British excess death rates
UK PIP (British disability benefit recipients data)
Life insurance data is showing a massive spike in excess deaths among younger, working-aged people, that began in 2021. Why?
According to US mortality data, excess deaths in September 2021 among 25- to 44-year-old Americans were 70% above normal. Why?
A report by the non-profit Society of Actuaries found that 34% more 35- to 44-year-old Americans died than expected in the last three months of 2022. Why?
As of May 2023, the most recent month for which data are available, deaths in this age group remained 10% above expected. Why?
More deaths occurred among white-collar than among blue-collar workers. Why?
Why are so many of our youngest in society, including even under-fives, becoming so sick? Why are so many dying unexpectedly?
https://www.ukcolumn.org/video/the-numbers-dont-lie-excess-deaths-ed-dowd
Multiple choice … what is causing the excess deaths since 2021?
If the market is looking 6 months ahead and things look bad, why is the stock market at or near all time highs ?
The market and the real economy. Two different things.
https://www.fool.com/investing/2024/05/24/these-3-powerhouse-stocks-drive-19-of-sp-500-gains/
Besides, with day trading so ubiquitous don’t think ‘the markets’ are so far-sighted.
The market sees a Trump victory. Lets gooooooooooooooooooo
It’s really just five or six mega-cap AI stocks driving the rally. The S&P 495 index is slightly negative year-over-year.
Why is Consumption part of GDP?
The Mirage is NOT using UNIT VOLUMES, year over year, for LIKE PRODUCTS.
Also, SHRINKFLATION is also not part of these reported numbers, but we all know about those shenanigans, right?
Thus, if we selected LIKE PRODUCTS, SAME SIZES in ounces and compared, then we would see if the same VOLS are in the numbers.
People CUT BACK when price inflation occurs. Smaller sizes of meat weights, fewer beers, etc. They simply do not have the money now. RENTS and INSURANCE are eating up more money as well.
Insurances on all of vehicles are up by 32% year over year, no changes in coverages. I am raising my deductibles.
I was just talking to a good friend, a retired wheat farmer in North Dakota, measured I.Q. of 164 and smarter than anyone I have ever known, who clued me in on Biden’s Parkinson’s four years ago. He says that potato chip volumes are down, and he would know. This is disguised by inflation.
This is gas station food, he says, and if people are buying fewer potato chips that says a hell of a lot. He says gasoline sales volume is down by 3%. I haven’t checked it but I will. I laugh at Biden and the Ds going after alleged profiteering. I checked the margins of the top 5 grocery retailers and the to 5 food processors, and their margins have not changed in any material way.
No wonder the Ds are trying to put Trump in jail. I cannot possibly stress it enough: If Trump wants a landslide that cannot be defrauded, he will lock his Inner Eddie Haskell in the attic, call forth whatever residual maturity he might have ever possessed, and focus like Ross Perot’s laser beam on the deteriorating economy.
About 20% of the voters could go either way, and at present most of those voters are put off by Trump’s incessant hyperbole. They might vote for him anyway, but if he were to uncork hidden rationality and steadiness, he can turn a 2% victory margin into 10% or better. The path forward is simple and blindingly obvious, and the real question is whether or not Trump is smart enough to see it. We shall soon find out.
My favorite story about the North Dakota guy. Anyone remember the Glomar Explorer and Project Azorian, the one that raised part of the Soviet nuclear sub that sank in the North Pacific in the late 1960s? At the age of 21 or 22, this guy who had never seen an ocean found himself on the Glomar Explorer as the enlisted radioman.
The radios weren’t working well, and the geniuses at CIA HQ in Langley, VA couldn’t figure it out. My friend fixed it. I asked him how he did it, and he said: “It was a little physics and some stratosphere. Took me 45 minutes.” Was given a commendation and invited to dinner with the captain and the senior officers, a very big deal back then. And then he went back to N.D. and took over his fathers farm.
He knows he has a 164 I.Q. because he got a perfect score on a very hard test in high school. The principal accused him of cheating, which he denied, and the compromise was an I.Q. test. Kids, this country is gloriously fucked up and always has been, but never sell America short. We have reserves that no one knows about until we really need them. It wont be easy, but we will get through this.
Hard times make strong men. Good times make weak men. Weak men make hard times, and so it goes. We have one hell of a country. People from all over the world come here for a reason. Never forget that.
Hell of a story. Thank you for sharing. God bless that guy. You too.
Thanks. God only knows how or why it happened, but in two careers I ran into some VERY intelligent people on the two coasts. I smile to think that the smartest of every last one of them is a potato farmer from East Dogshit, North Dakota who reads scientific papers all the way to the end, contacts the authors, and occasionally gets them to correct their work. He is Icelandic, and as a group, those people are way up there on the brainpower scale. Ya sure, ya betcha.
Wait, I missed something. Hard times make strong men. Strong men make good times. Good times make weak men. Weak men make hard times. And so it goes, like waves on the ocean.
Look, we fight so hard out of faith in this country. If we didn’t have faith, we wouldn’t bother to fight for it.
A long time ago, I talked to a guy who had been to Egypt to see the pyramids. What really blew away him even more than the pyramids were the beggars who would sit there and not bother to brush away the flies on themselves, because there would always be more of them. He could not understand it.
How could he? He was an American, and Americans are born with a flyswatter in their hand. Always flies buzzing around, sometimes less and these days more. We will keep swatting. It is who we are, what we are. We swat the flies.
“People from all over the world come here for a reason” They don’t know any better.
Nah Bruh,
Millions of immigrants create a better life for themselves in the USA. They don’t have the BS bias against it.
Gas sales are down because there are MILLIONS of EVs on the road and ICE vehicles are being used less often.
Potato chip sales at GAS stations are down because EV owners do NOT need to go to Gas stations anymore because they charge at home.
This Trend will continue as more EVs are sold every year and more ICE vehicles age out and are replaced or parted out or totaled in accidents.
About 20% of all New Vehicles Globally are EVs. About 10% of all New Vehicle Sales in the US are EVs. That means that the number of total EVs is continuing to increase while the number of ICE vehicles continues to decrease.
Bullshit. I was in the Bay Area three weeks ago, and even there the VAST majority of passenger vehicles were ICEVs. Once you get on the open road (I have taken three road trips in the past year for a total of about 7,100 miles) there are hardly ANY electric vehicles.
People NEED to cut back on Food and Beer. Most of the country is Overweight or Obese.
Shrinkflation would be great is the average fat American LOSES Weight and reduces Diabetes and the MASSIVE Costs related to obesity and Health Issues.
You are almost as stupid, arrogant, and obnoxious as Engel and Eddie. Plonk.
Consumer spending is weakening, which is good news for inflation, but private domestic investment is booming. That’s why there will not be a recession. GDPNow was unchanged at 3.1% with estimates for PDI going from a gangbusters 7.7% to a stunning 8.8%.
We shall see how that turns out. Really, ya never really know. Maybe both Mish and I, separately and independently, are wrong about the state of the economy. But I am the picture of a Doubting Thomas on soaring GDP.
By the way, inflation is strictly a monetary phenomenon. If prices go down because of weak demand, profits will decline and then vanish, and enterprises will go under. The way to contain inflation is by restricting the growth of money. All the rest is, to quote a phrase I snagged off a bathroom wall in college long ago, “whipped cream on dogshit.”
That’s completely not true. Inflation is NOT a Monetary phenomenon. Lack of some THINGS like OIL in the 70’s or working age population or affordable housing (not ENOUGH houses of the proper reasonable size) are all inflation due to scarcity or restrictive supply.
San Francisco has ridiculously high prices because they don’t allow enough housing to be built (at affordable prices) to satisfy demand.
Yes, monetary issues, such as printing money can cause inflation…but MANY other factors contribute and some overwhelm. ALL Real Estate is Local, as the saying goes. Too few affordable homes / apartments / condos and you get massive housing / rent inflation.
Algos say tomorrow is Juneteenth, lets drive up indices further, more Fomo! Who needs people …
2.2 MM Federal civilian employees will be out celebrating the holiday tomorrow. Spend some $ peeps! They work hard. They needed another holiday.
Stop it with the facts Mish.
What I have been seeing in the last 1 year is a) lots of fake job postings asking for imaginary specialties (to show their investors that they’re growing), b) very high prices in food, energy, and some basic services, c) lots of unrelated companies trying to make money out of AI data pooling, and lots of tech companies changing their ToS to be free to sell user content and information, d) lots of emails with bottom price offers from desperate small companies I quit following years ago, e) long lines at Starbucks now almost reduced to 2-3 cars. I was wondering when the financial blogs would catch up with the situation on the ground.
It will be interesting to hear the White House and msm “spin” all these bad economy and job numbers. Maybe they’ll use the latest excuse Biden used for his son Hunters felony conviction. “It’s because I’m running for re-election”
Mish-How would your chart look if you used the control group retail sales and adjusted that by PCE instead of CPI (since the series are weighted similarly, arguably a better measure of real core spending)? I’m guessing it doesn’t change the overall story. Just curious.
Buddy of mine is a service manager at a car dealership in a major metro area. He said business is not good. People are forgoing routine maintenance on thier vehicles, or they are taking thier vechiles elsewhere.
That kind of stuff is always the first thing to slide.
On the other hand the stealer-ship is the absolutely worst place to go once you are out of warranty. They charge crazy prices for everything.
In general auto maintenance has gotten really expensive because everything is some kind of specialized part.
Weekends have been kind of quite at restaurants near me in GA. New orders in our manufacturing business have slowed to a trickle.
Who can afford to eat out anyway Maybe the top 10%
Who would even want to eat out anymore?
The food is generally over-priced crap and the “service” is even worse.
One thing about most US restaurants is that their cooks do not know anything about nutrition and meal preparation. They’re the average migrant who claims that they know how to cook. And meats are stored improperly, if they are not already the cheapest unsold throw-away pieces from super markets. Their pizzas overloaded with cheese to the point of heart attack inducing, and expired/non-refrigerated sauces. Very unhealthy food, most of them.
The inflationary depression is chugging right along. Even a bit faster than expected.
Deeply disturbing numbers
and then interest rate cuts? Market goes higher… thats what they want. Sure they will let Main St USA continue to crumble like it has been, but hey buy the S&P index …………………..It is sickening…….
rate cuts? where? sez who?
we will soon see what happens when mindless MoMo markets pathologically front-run rate cuts for 12+ months… and the rate cuts never come.
Powell. Does. Not. Care. About. Markets.
why would the Fed rescue/support bubblicious US paper asset price levels when an overwhelming flow of foreign capital will pour into any & every US market correction??
the fed doesn’t need to support US market/asset prices – foreign capital will perform this task in any case, regardless of interest rates.
Higher For Longer.
because they have all along thats why. Listen, I am not saying you are wrong, I agree with you that I think higher rates for longer, but I will believe it when I see it, then admit to you I was wrong.
Lets see how this plays out
“…believe it when I see it…”
???
um, you have been seeing it… all year… and zero prospect of cuts before Nov. Powell is not Yellen. Powell is not Bernanke.
but if you need to see/wait more, i guess that’s what you have to do.
Nope. The Fed will wreck the smaller banks and / or consumers because of Credit being unnecessarily high in both Commercial Real Estate and Credit Cards
???
Fed has ALREADY COMMITTED to regional bank failure+consolidation. It’s part of the plan.
CRE needs & deserves the haircut–>amputation.
Why would anyone try or want to avoid this correction?
you sound like someone who thinks ZIRP should be the norm. yikes.