Retail sales, the lifeblood of our economy (68% of GDP), always fall two months in a row when we have full employment, tax cuts are making us richer, the economy is booming, and consumer confidence is at all-time highs. Right??
The truth is that inflation is running hot on the things we need to survive in our daily lives (energy, clothing, rent, health insurance), but inflation in wages is non-existent. Tax cuts at the Federal level are more than eaten up by tax and fee increases at the state and local level. Credit card, auto loan, and student loan debt are at all-time highs.
The delusional American consumer has bought the propaganda peddled by the politicians, Wall Street and the mainstream media and leveraged up over the last eight years to keep up with the Joneses – Again. They are tapped out. The coming recession and stock market crash will be a one two punch that provokes a lot of anger among the masses.
Maybe a global war will distract them from their economic despair. Stay tuned.
Following a disappointing drop in January, expectations were for a 0.3% rise in retail sales in Feb but BofA was far less sanguine, warning that sales could miss because tax benefits only went to people who had withholdings reduced, not those who actually got a refund as they were delayed.
And BofA was right, Retail Sales dropped 0.1% MoM (with Jan revised up to -0.1%), falling for the second straight month for the first time since October 2015.
Retail Sales disappointed across the board with Ex-Auto , Ex-Auto & Gas, and Control Group all missing expectations.
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This retail sales print is the lowest analyst expectation…
Under the hood… Energy and Food costs fell most as Transportation jumped…
Both Department Stores and Gas Stations saw sales drop…
This also confirms the drop in the Vice Index drop that foresaw this retail sales decline.
SouthBay Research has a “Vice Index” that that tracks spending on gambling, alcohol, drugs, and prostitution. And as of February, the vice index just tumbled, suggesting that after a brief burst in late 2017 and 2018, the consumer-driven economy is again in trouble.
Or, as SouthBay’s Andrew Zatlin writes, the “Vice Index Points to Tax Cut Hangover: Slower Pace of Consumer Spending for 1Q”
Here is the same Vice Index shown unlagged: it shows that the impact of the Trump tax Cut was “Short but Sweet”, and ominous warning for the broader economy.
It seems consumers pre-spent a lot of the Trump tax cut: In anticipation of the tax cut, Households went on a spending spree. You can see that in the pace and timing of the drop in savings: a little drop in September (when the tax cut seemed likely) and a bigger drop in November when the cut was agreed. Consumers were spending ahead of the expected savings.
Very pithy, dead on, and reality based article Admin.
“The coming recession and stock market crash will be a one two punch that provokes a lot of anger among the masses.”
Unless the 10th dimensional chutes and ladders expert (hat tip to commenter who came up with this) rides in on white horses with the NSA Qew branch and saves us all. giggle – guffaw – chuckle – snort.
WWQD
“Spending On Hookers, Drugs, & Booze Tumble”
See?
That December Executive Order {cause}
…put a freeze on the financial assets of all the black hats in D.C., L.A., NYC, Hollywood, and beyond.
They can’t access their cash for their vices, negatively affecting a vital part of the economy. {effect}
Maybe Crown Royal will go on sale now. {optimism}
Who keeps accurate track of spending on “Spending On Hookers, Drugs, & Booze”?
And how long have these categories been tracked?
…and do they know who is buying?
The U.S. Senseless Bureau calls me weekly and asks how much I spent on hookers, drugs and booze. The voice sounds a lot like my sister-in-law, but it be hard to hear over those rowdy drunk, stoned-out hookers.
Well after those Reaganomic Tax Cuts and reports of consumer confidence at record levels, we should expect this House of Cards to collapse fairly soon.
The CBO and FEDGOV might as well be picking ping pong balls out of a lotto machine. This downward spiral is gonna hit the bottom soon.
The Quinn Retail Health Indicator is showing increased weakness in St. Louis suburbs. There is an increasing amount of retail space sitting empty. What’s it looking like elsewhere? Some body is holding the bag on the retail space mortgages.
Is it possible that the identity of Q is……………….Quinn?