The headlines in the MSM are blaring that retail sales soared in August, up 0.9% over July. I guess the average American is flush again with all those new jobs being created by Obama. They must have splurged on those back to school sales. I’m sure JC Penney sales took off.
Here is a link to the press release:
http://www.census.gov/retail/marts/www/marts_current.pdf
Let’s look beneath the headlines and see why retail sales SOARED in August:
- Retail sales grew by $3.6 billion in August, over July.
- The “growth” was driven by two retail categories. Gasoline sales grew by $2.4 billion in one freaking month – a 5.5% one month increase. Motor vehicle sales increased by $1 billion. I use the term sale loosely, as the car dealers are giving away their vehicles with 0% seven year financing to deadbeats. That ain’t a sale. So, 97% of the retail sales increase is from borrowing cars and filling them up with gasoline. Sounds like a fantastic retail surge.
- Sales actually fell at clothing stores and food stores. That is surely a sign of a booming economy. Remember, August was back to school month.
- Even the Wal-Mart category of merchandise stores saw sales decline.
- The year over year data is just as bad. Retail sales were $18 billion above last year, a 4.7% increase. Of course, inflation is above 5% so real retail sales are negative.
- The booming retail categories over last year are:
- Motor vehicle giveaways up $7 billion over last year.
- On-line retail up $4 billion
- Restaurants up $3 billion
- Gasoline up $1 billion
- Food stores up $1 billion
When I look at the monthly and yearly figures in this report I see a consumer collapsing. The rising costs to fill your gas tank is sapping whatever spending you may have planned. The medicine that Ben Bernanke just prescribed will drive gas prices higher, food prices higher and will kill the patient. As retail sales implode further, more retailers will go under, more jobs will be lost, more malls will default on their loans, and more pain will be instore for the average American.
But don’t worry your head about such things. Buy stocks and root for your favorite contestant on The X Factor or The Voice.
TeresaE says:
Did my every other month trip to Costco last night.
OMFG!
I cannot believe the increases in price on the items I bought. Vinegar made another 15% leap.
Increased sales my ass.
If we still looked at widgits produced/sold, not just $$$, it would be plain for all to see.
I see next year being brutal for food kitchens, charities and state/local revenues.
Fiat and Ponzi on.
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14th September 2012 at 11:07 am
Administrator says:
At least our factories are humming. OOOPS!!! Maybe not.
Industrial Production Plunges Most Since March 2009
Submitted by Tyler Durden on 09/14/2012 09:27 -0400
In one more example of why we are going to need more-er and open-ended-er QE from the Fed, today’s dismal data rolls on. Industrial Production dropped 1.2% MoM – its largest drop since March 2009 – and missed expectations by the most since December 2008. The market (expectedly) is unimpressed and stable – fully aware that the Fed’s new infinite QE will simply be expanded to an infinte-er QE should things go from worse to worse-er. To add more salt to the wound, Capacity Utilization dropped to its lowest of the year and missed expectations by its most in 16 months. 15x P/E multiples here we come – all supported by moar hockey-stick growth trajectories, infinity +1 printing, and a status quo who needs moar commissions. So much for cleanest dirty shirt, eh? It seems ‘they won’t come’ in our ‘if we build it’ economy – as factories go quiet from the over-exuberant mal-investment of channel-stuffers.
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14th September 2012 at 11:13 am
AWD says:
Millions of people that got off unemployment benefits and onto disability finally got their “back pay” check for $30,000 last month. Simple as that really.
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14th September 2012 at 11:59 am
WHY DID RETAIL SALES SOAR IN AUGUST? « The Burning Platform « Deals Sales Management says:
[...] the rest here: WHY DID RETAIL SALES SOAR IN AUGUST? « The Burning Platform Comments [...]
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14th September 2012 at 12:30 pm