What The "Real" Retail Spending Report Reveals

Tyler Durden's picture


When it comes to the validity, accuracy and honesty of government-sourced data, sadly there is much to be desired in the time of the New Normal, when governments have made it very clear they will resort to any measure to boost confidence - from the wealth effect to flagrantly doctoring economic (dis)information.

Luckly for now at least, the private sector provides a somewhat credible alternative, although even that is rapidly being subsumed by the government apparatus (see ADP morphing into BLS-lite). Still, it is a useful data point for those who still care about the anachronism known as "fundamentals." So in order to supplement the retail data disclosed earlier which according to some was the "most important retail spending" report in years, one useful counterpoint is sales data as disclosed by credit card processors such as MasterCard (sadly often hiding behind subscription paywalls). Here are some highlights of what a parsing such a recent report reveals, courtesy of Bloomberg.

  • Since the end of 2009, growth in U.S. consumer spending has been driven largely by luxury goods and consumer staples. The middle class has less disposable income (or access to credit) available for discretionary purchases.
  • The growth of U.S. retail spending (excluding autos) slowed from an annual average pace of 8 percent in 2011 to 5.1 percent in 2012. In the first five months of 2013, U.S. retail sales have been growing at an annual average pace of just 3.5 percent.
  • U.S. consumers have been cutting spending on electronics, air travel and gasoline since the beginning of the year. In contrast, sales of necessities such as groceries and baby clothes are robust.
  • U.S. spending on home furnishings and repairs continues to be robust, which suggests that the housing recovery still has some legs.
  • On the other hand, the surge in spending on auto maintenance means that people are reluctant to buy new cars, preferring instead to repair what they already own. Similarly, there has been a significant decline in auto parts sales since the end of 2012.
  • U.S. purchases of high-end jewelry have grown much more slowly than total retail spending. Moreover, high-end jewelry spending hasn't matched its peak in December 2007.
  • Consumption in Canada has been weaker than in the U.S. for several years despite a much healthier labor market. This might be explained by the slowdown in China and the contraction in commodity demand.
  • U.K. luxury spending seems to be at least partly driven by the prices of oil and natural gas. That suggests that wealthy Russians and Middle Easterners are a significant source of demand for high-end goods in British stores.
  • The U.S., U.K. and Canada have all experienced a surge in "staycations" as families avoid expensive travel in favor of simpler -- and cheaper -- pleasures at home.
  • Perhaps reflecting the global sell-off in commodities, spending on luxury goods in the U.K. has been declining from prior-year periods for the past six months. Growth in U.S. luxury spending has slower than total U.S. retail sales in the first few months of 2013.
  • MasterCard Advisors estimates that Canadian retail spending has only increased by 0.5 percent in the past 12 months. As recently as March, the 12-month change in consumer spending was actually negative.

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Thu, 06/13/2013 - 11:45 | 3654239 caimen garou
caimen garou's picture

don't know about anyone else but my major spending is on food,energy,& whiskey! in that order.

Thu, 06/13/2013 - 11:48 | 3654246 idea_hamster
idea_hamster's picture

"U.S. spending on home furnishings and repairs continues to be robust"

Didn't we just go over this in a prior post?


Thu, 06/13/2013 - 11:51 | 3654255 Tyler Durden
Tyler Durden's picture

"a somewhat credible alternative... it is a useful data point" - doesn't mean it is 100% accurate.

Thu, 06/13/2013 - 12:04 | 3654279 NotApplicable
NotApplicable's picture

I'm just a broke-ass Joe,  and everywhere I go  

People know that I ain't payin'

Bumming every dance, stealin' every chance

Ooh, what they're sayin'


There will come a day, and wealth will pass away

What'll they say about me?

When the end comes I know, they'll say screw that broke-ass Joe

And life goes on without me, cause


I........ ain't got no money!

Thu, 06/13/2013 - 12:30 | 3654369 nugjuice
nugjuice's picture

A Tyler sighting! You're my hero. I upvote you before I even read your post

Thu, 06/13/2013 - 11:48 | 3654249 GubbermintWorker
GubbermintWorker's picture

Mine is close....food, energy, merlot wine, and pot. The last two are good for staycations.

Thu, 06/13/2013 - 11:53 | 3654263 caimen garou
caimen garou's picture

got to keep the "p" word  quiet, eric may be reading zh

Thu, 06/13/2013 - 12:17 | 3654323 Pooper Popper
Pooper Popper's picture

The P word!!!


Thu, 06/13/2013 - 12:33 | 3654350 monad
Thu, 06/13/2013 - 12:32 | 3654373 nugjuice
nugjuice's picture

You spend more on merlot wine than pot? Either I'm paying too much for pot or I'm buying really cheap merlots

Thu, 06/13/2013 - 13:20 | 3654556 GubbermintWorker
GubbermintWorker's picture

$5.99 bottles of Merlot and $400/ounce pot. But that pot does last a long time....i think....hell, I don't remember ;-)

Thu, 06/13/2013 - 11:55 | 3654266 Freewheelin Franklin
Freewheelin Franklin's picture

I live in a van down by the river, so my major spending is on bitches and blow, bitchez.

Thu, 06/13/2013 - 11:56 | 3654267 Miffed Microbio...
Miffed Microbiologist's picture

In my dreams! Mine are taxes,food,mortgage and personal pleasures. Obviously not in the order of choice and I dare not divulge the percentages.


Thu, 06/13/2013 - 12:46 | 3654431 ShrNfr
ShrNfr's picture

How about lead in a copper jacket??

Thu, 06/13/2013 - 14:42 | 3654851 GubbermintWorker
GubbermintWorker's picture

Nah, like PM's, I stockpiled that a long time ago.

Thu, 06/13/2013 - 11:46 | 3654243 gjp
gjp's picture

Still amazingly growing, S as ever has yet to HTF.  Somehow there is enough liquidity and credit to support ongoing spending ...

Meanwhile S&P up, bonds up, gold down.  Another bear party cut short.  Central Wankers still rule for now.

Thu, 06/13/2013 - 11:49 | 3654251 Frastric
Frastric's picture

Stawks are merely doing their umpteen dead cat bounce, personally I think a top has been set in and the epic carnage in the Nikkei seems to be one of the precursors to the failure of the central banking put.

Thu, 06/13/2013 - 12:38 | 3654400 madbraz
madbraz's picture



Bernanke overplayed his card with QEternity - it's effectiveness as a means to manipulate risk higher is coming to its limits.  He got O re-elected and is close to avoiding a crash on his watch, so from his view it was successful.  Unfortunately for him, there is still time left on his watch and the cracks are exposed.


Next would come purchases of equity investments, much like Japan (although what is not mentioned is that they buy small amounts of REITs, in relation to bond purchases).  However, as it is not allowed by Fed mandate, it would require a crash first to justify it.


As in 2007, 2008, who knows - maybe we see an initial decline of 30%, then a bounce from extreme Fed measures, bank bailouts and one for the sacrificial altar (hello morgan stanley, i hardly knew ye!) and then the dip to sub 1,000 on the SP500.


It all makes perfect sense under reasonable expectations that earnings have peaked at $90 (reported, operating of $100) and a PE 8-12 multiple in line with a no-growth global environment.

Thu, 06/13/2013 - 13:44 | 3654637 MachoMan
MachoMan's picture

However, as it is not allowed by Fed mandate.


Thu, 06/13/2013 - 11:52 | 3654258 medium giraffe
medium giraffe's picture

Anyone who doesn't realise the consumer is on life support is deluded.

Thu, 06/13/2013 - 12:06 | 3654286 NotApplicable
NotApplicable's picture

Say, why exactly is my IV needle made out of lead?

Thu, 06/13/2013 - 12:22 | 3654346 monad
monad's picture

So sorry. Its supposed to be made out of depleted uranium and recycled WTC evidence.

Thu, 06/13/2013 - 11:53 | 3654262 TheEdelman
TheEdelman's picture

"On the other hand, Quinlan says that the surge in spending on auto maintenance means that people are reluctant to buy new cars, preferring instead to repair what they already own. Similarly, there has been a significant decline in auto parts sales since the end of 2012"

In a diametric polar universe.


Thu, 06/13/2013 - 12:28 | 3654363 KidHorn
KidHorn's picture

That didn't make sense to me either. Unless people are getting their parts repaired instead of replaced, which also makes no sense.

Thu, 06/13/2013 - 12:44 | 3654424 Meme Iamfurst
Meme Iamfurst's picture





They are not counting such 'outlets' as ebay.  Friend just got an AC compressor,rebuilt for 40.00 with guarentee.  NAPA wanted 185.00, the shop wanted 450.00 plus.  So what would you do?

He got the part, put in himself in an hour, took to be 'vaccumed' and charged.  Total for all $85.00

Thu, 06/13/2013 - 13:22 | 3654565 insanelysane
insanelysane's picture

Exactly.  Unemployed guy I know did the same for an alternator.  He says to me when I asked him how long it took; "shit, I got all day, everyday, so I had a beer after each bolt coming out and going back on."

Thu, 06/13/2013 - 16:36 | 3655531 TheEdelman
TheEdelman's picture

Maybe Macgyver was right.  An engine can be fixed with just duct tape and egg whites.

Thu, 06/13/2013 - 14:03 | 3654625 OS2010
OS2010's picture

Same thought here, but I figure it means that people (who have become very, umm, inadequate when it comes to repairing things themselves) are having the repairs/maintenance done by "professionals" rather than buying the parts and doing it themselves.  The parts bought by the pros may not be included in this accounting.

We here are probably part of that shrinking minority which automaticlly equates maintenance and repair with "Parts plus weekend hours."

Thu, 06/13/2013 - 11:55 | 3654265 TrumpXVI
TrumpXVI's picture

+1 to staycations.

I have made it a point to find things to do close to home.  I just discovered PA Renaissance Faire last year; only 54 miles away.

The bike trails and the local gun club/firing range remain standards.

And there are frequently special exhibits at all the museums in Philly.


For me, if it's further than 75 miles away, then it's not gonna happen.

Thu, 06/13/2013 - 12:01 | 3654277 PAWNMAN
PAWNMAN's picture

I own a pawn shop, and the change in our clientele over the years has changed drastically. It's no longer just lower income people pawning their 10k wedding ring to make rent. Since 2009 we see a lot more middle and upper inome people bringing in their Rolexes, high quality diamonds, and high karat jewelry to loan against. What does that tell you about the underlying economy?

Thu, 06/13/2013 - 12:05 | 3654282 TheEdelman
TheEdelman's picture

I love Pawn Stars!  

Is this Chumlee?

Thu, 06/13/2013 - 12:30 | 3654366 KidHorn
KidHorn's picture

Chumlee doesn't own the pawn shop. It must be the old man.

Thu, 06/13/2013 - 12:47 | 3654434 NotAMathWhiz
NotAMathWhiz's picture

Sounds too cheerful to be the old man...

Thu, 06/13/2013 - 13:24 | 3654572 insanelysane
insanelysane's picture

The old man has his own line of silver coins.  Watch out.  Looked what happened to Bit Coin and those were virtual coins.

Thu, 06/13/2013 - 12:04 | 3654281 luckylongshot
luckylongshot's picture

We are now at the point where not only are our politicians lying to us all the time but all the economic data they give us is untrue as well. What use are elected reprentatives who only lie to their electorates?

Thu, 06/13/2013 - 12:09 | 3654293 therover
therover's picture

"Since the end of 2009, growth in U.S. consumer spending has been driven largely by luxury goods and consumer staples. The middle class has less disposable income (or access to credit) available for discretionary purchases."

No need for any other bullet points.

Thu, 06/13/2013 - 12:20 | 3654341 monad
monad's picture

Fuck You Fascist Statist Pigs

Thu, 06/13/2013 - 12:23 | 3654349 slimething
slimething's picture

Yeah but Art Cashin says everything is good now.

Thu, 06/13/2013 - 12:24 | 3654352 youngman
youngman's picture

What % of the increse in spending is the inflation factor....loaf of bread goes from $3 to $3.50...is counted as and increse of sales of $.50....but same amount sold...and probably less as packaging is getting smaller and smaller too....

Thu, 06/13/2013 - 13:46 | 3654649 GreatUncle
GreatUncle's picture

This "rate" 30 years ago meant a price doubled ever 10 years. Now that "rate" is nearer to ever 5.

The rate is a good indicator of the unsustainability of the current economic mechanism.

Now go pull up the DOW, stuff the logrithmic scale and look at the absolute values over the last 100 years. In the 70's the economy was triggered into a new rate. the preceding 60-70 through world wars did not change in value alot. Prices were consistent and the real argument of how this was also the real economy is MONEY MOVES FOR A BETTER INVESTMENT so if it is in stocks its in the rest. If it is not in the stocks then you can exlude the rest. 

Thu, 06/13/2013 - 12:29 | 3654365 doomandbloom
doomandbloom's picture

When is the IPhone 5 S coming ? sooo want one...its going to be sooooo goood.

Thu, 06/13/2013 - 13:25 | 3654577 insanelysane
insanelysane's picture

It's already out.  It's called a Droid.

Thu, 06/13/2013 - 12:30 | 3654368 Nue
Nue's picture

When we went to a savings and investing economy to a borrow and spend economy the death warrant on the American economy was signed. To a Kenysian E-con-artist-mist the consumer should just borrow money to buy stuff and when the loan comes due they should just borrow more money to cover the previous cost of borrowing ad infinitum. That might work for Central Banks and Goverments but it does not work for Joe Six-pack. The consumer is too busy trying to pay off his other debts and at the sametime deal with the dramtic price increases in his ESSENTIAL GOODS. At this point A debt Jubliee is in order but since debt is now money that would trigger the biggest deflationary event in the history of mankind.

Thu, 06/13/2013 - 13:28 | 3654589 insanelysane
insanelysane's picture

They could fix the ecomony in seconds if they just stopped collecting income tax for a couple of years.  Costs around the same as the total cost of QE infinity but actually works.  Problem's that the banksters wouldn't get enough of a cut.

Thu, 06/13/2013 - 12:39 | 3654406 logos5
logos5's picture

" ....the anachronism known as "fundamentals.". "

Now that's rich! : )

Thu, 06/13/2013 - 12:45 | 3654426 GoatHerder
GoatHerder's picture

Who needs a fancy resort with a swimming pool when you have a stock tank, scotch and a nice cigar.


Thu, 06/13/2013 - 12:50 | 3654447 youngman
youngman's picture

Reminds me of the intro to the show " Petticoat Junction"....lol...good song too...

Thu, 06/13/2013 - 12:55 | 3654481 GoatHerder
GoatHerder's picture

I prefer home made scotch as opposed to the crap TGIF Fridays was serving recently because the chances of me going blind are lessened.

Thu, 06/13/2013 - 12:56 | 3654483 GoatHerder
GoatHerder's picture

I prefer home made scotch as opposed to the crap TGIF Fridays was serving recently because the chances of me going blind are lessened.

Thu, 06/13/2013 - 12:57 | 3654485 GoatHerder
GoatHerder's picture

It was so clever I had to say it three times.

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