Retail Sales Confirm "You Can't Spend What You Don't Have"

Tyler Durden's picture

Despite all the rancor about seasonally-adjusted ad hoc beats of holiday week retail sales (amid burgeoning discounts), the trend (post the Hurricane Sandy-driven surge) in GAFO (General Merchandise, Apparel and Accessories, Furniture and Other Sales) retail sales is most explicitly lower. As Bloomberg Brief notes, consumer incomes are in a fragile state and between the ATRA deal and a 'stable' at best unemployment picture, it seems that the YoY change in retail sales is indicating per capita disposable income is set to decline further. As Rich Yamarone concludes: it appears "You can't spend what you don't have." It seems 'tax-the-rich' is also misfiring as those making over $90k per year report recent spending at its lowest for this time of year since 2008.

 

GAFO Retail Sales appear to be indicating a turn to come in disposable personal income...

 

and sure enough, via Gallup, Upper-income Americans' (defined as those making at least $90,000 per year) self-reported daily spending was lower this November -- an average of $113 -- than in any November dating back to 2008. Upper-income spending has been trending downward since September, although the decline has not been large enough to drag down the overall spending figures.

 

Although November marks the beginning of the holiday season -- generally a time for spending and splurging -- Americans did not spend any more than usual this November, and upper-income Americans appear to be spending less than usual.

 

Source: Bloomberg Briefs and Gallup