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Retail Sales Plunge Twice As Much As Expected. Worst Back-To-Back Drop Since Oct 2009
Following last month's narrative-crushing drop in retail sales, despite all that low interest rate low gas price stimulus, January was more of the same as hopeful expectations for a modest rebound were denied. Falling 0.8% (against a 0.9% drop in Dec), missing expectations of -0.4%, this is the worst back-to-back drop in retail sales since Oct 2009. Retail sales declined in 6 of the 13 categories.
Clearly it has been a very cold winter, with both December and now January big disappointments.
Retail sales disappoint, again
In worse back-to-back drop since oct 09...
The retal sales control group continues to crawl sequentially, while the relatively strong Y/Y data is still due to the base effect of December/January 2014 being slammed by the "Polar Vortex." If February spending does not pick up significantly, we will see a 2% handle.
The breakdown of sales by category shows that 6 of the 13 major categories posted a decline, but what was most surprising was the 1% drop in auto dealer retail sales, which slid 1% despite the low, low gas prices. Did subprime auto loans just run out?
* * *
Finally, none of the above should come to a surprise to those who read our article from Tuesday, previewing not only today's miss but explaining its reason as well:
Why Bank Of America Is Stumped: Despite "Lower Gas Prices" US Consumer Spending Has Plunged
One just has to laugh while reading the following hilarious attempt
to justify the cognitive dissonance by Bank of America's analysts - and
everyone else for that matter - who were oh so certain that tumbling (if
not any more) gas prices would translate into a "splurge" of spending
on non-gas related goods and instead, when looking at their internal
data, are seeing something inexplicable.
To be sure, it wasn't just BofA data that has shown a plunge in discretionary spending: the December retail sales report last month courtesy
of the government showed precisely the same, even if BofA's analysts -
and everyone else - rushed to describe as a "one-off" aberration which
would quickly be revised higher.
Well, it won't be. Because while the BLS may seasonally adjusted and
revise employment data to make the economy seem far stronger than it
really is, when it comes to spending, every dollar leaving one pocket
ends up in another pocket, and can thus be traced.
This is how Bank of America explains its total confusion why the US
consumer so desperately refuses to follow the "recovery" script.
Getting impatient
All signs point to a robust consumer: job growth has accelerated,
with an average of 336,000 jobs created a month over the prior three
months, gasoline prices have plunged and interest rates have declined.
Consumers are taking notice with sentiment measures climbing higher. According to the University of Michigan survey, consumers have not been this upbeat since January 2004,
when the economy was booming. The natural outcome should be for
consumers to splurge, hitting the malls and going out to restaurants. But much to our surprise, the data suggest otherwise.
The BAC internal data show little improvement in expenditures in
January, even after netting out gasoline and autos. Sales ex-gasoline
and autos, on BAC credit and debit cards, was unchanged mom SA and have
slowed over the past few months (Chart of the Month). And it is not
unique to our data – the Census Bureau painted a weaker picture with the
December report (however, as we argue in this note, we think the risk
is that core control sales are revised higher on Thursday).
How can we explain this disconnect? It seems that consumers
are saving some of the windfall cash from lower gasoline prices, with
the personal savings rate increasing to 4.9% in December. Another
factor is that our data may be skewed by consumers with credit cards
who are not as budget constrained as those who spend predominately with
cash. Looking at a breakdown of spending by key sectors, we find a
pick-up in sales at home improvement stores, restaurants and grocery
stores, but a slowdown in lodging and furniture sales.
And not just Bank of America. Moments ago Wells Fargo admitted the same:
- WELLS FARGO & CO CFO: CONSUMER SAVINGS ON LOWER GASOLINE PRICES NOT TRANSLATING INTO A PROPORTIONAL INCREASE IN SPENDING
And do you know why? Because, as we explained many months ago, not only is there not going to be an increase in discretionary spending, but all the "excess" money will be spent on - you guessed it - undiscretionary Obamcare, i.e., the government's latest tax for the middle class:
The same Obamcare which already led to a surge in GDP in both Q3 and
Q4. And sadly for the propaganda-mongers, not even the BEA can
triple-count seasonally-adjusted or actual data. That... and $1.1
trillion in student debt certainly doesn't help either.
In other words, expect yet another conspiracy theory to become unconspiracy fact in 5... 4... 3...
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" The State of our Union is strong "
Core Retail Sales were even uglier:
http://www.forexfactory.com/#graph=57723
Consumers are just resting up for the next big push FORWARD!
BTFD
This is fucking easy...anyone can do it.
I feel like such a fool going to work today when I could just stay home and buy stocks for a living. dope.
Yup BTFD! Just wait until QE4 then you can really ride it to the moon!
They could make the numbers look so much better if they put Goodwill and garage sales in the hopper.
Nothing to see here. Please move along.
Fucking idiots! ^^^^
Steve Liesman said it was OK because of this and that and somethin' or other. I think .
That or I pooped my pants
Looks like the nail gun is frozen...
Who Knew the future could be so predictable.
How can we monetize it?
CNBC explains it plain and simple: there's alot of money sitting on the sidelines.
Gafaw ... Gafaw ... Gafaw ....
SHOW ME THE RECOVERY BITCHEZ
Obozocare!
Obozocare!
Obozocare!
It use to be 29.5 hr/wk.......looks like the rules have changed.
http://www.businessinsider.com/staples-workers-petition-company-2015-2
Why even bother working in the place. It's a job for secondary income workers, that's all.
I know a guy who had been working at Staples. He was doing a great job for them. I met him due to using their shipping dept. for UPS packages. He always went the extra mile, and did more than what the job asked. After about six months of seeing this, I offered him some part time hours in my own company, at much higher pay, but could only employ him during warm months. He decided to strike out and leave the Phila. PA area to move to upstate NY, reasoning that on his full time pay at Staples, he could afford to live in that area (he did have an uncle up there). So he bought a two family house for only $80K, with plans to rennovate and rent 1/2 the house. His father was making the three and a half hour trips up there on weekends, and they had the whole project about 85% complete. That was when Staples decided to eliminate some job positions. Highest paid go first, of course. And this was about a year BEFORE Obamacare, so he was guaranteed not to have a future with that company. Anyway, it all collapsed on him with the loss of his job, and the death of his father from cancer, so now he lives at home with Mom and babysits his sister's kids so she can go to work, and he sells what he can from home. That's a nice hope and change story, huh? Unfortunately, these kind of stories are becoming more common. And by the way, Obama wants to raise taxes.
Plug and play with these type of firms and it makes me ill silverer. That individual was an asset to the business but it does not matter. All they have to do is get the next warm body in there to fill the position, even if they do half the work. If you do not like the next person, what are you going to do, go to the local owned business supply company operating across the street. Oh that's right, they had to close, because these friggin' firms (like Staples) do not have to operate on the profit principle.
But, But, But Obama love the poor folks. The TV News people in nice suites told me so. Stop being racist.
All of the kids that I get to see in my line of work act like 2008 never happened - they get into volatile professions and sign mortgages as soon as the first paycheque arrives. Most don't even have families yet, but are all echoing the same old mantra that renting means throwing money away.
Well, I'm in film and television and most contracts are 6 months long. Long-term employment does not exist. Often takes half a year to find another half a year job. One has to move all over the country. Go to other countries even. Signing a mortgage that amounts to obligation to be stably employed and healthy for decades straight? Only an idiot (or speculator) would do that. I actually have more respect for speculators there. They're in it for a quick buck. You either win or loose. It's not a part of their deep life philosophy... but these kids, I tell ya. Not even kids...
Had a mid 40's co-worker sign a mortgage less than a month before getting canned. No amount of yelling in his face did anything. I told him he'd be an idiot to buy, and after he bought I once again reiterated.
What the hell are those people thinking? I quote ZH straight to their faces and don't sugarcoat it...
... and to cut the long story short - that's why I don't have any real friends.
@GetZeeGold
It use to be 29.5 hr/wk.......looks like the rules have changed.
At the bottom of your businessinsider story about Staples firing workers who work more than twenty-five hours was this:
NOW WATCH: Watch Out Lululemon — Women Are Going Crazy Over These No-Underwear Yoga Pants
america, a great country or what!!!!!
How's that wealth inequality working out for you?
In fairness, when Obama said that he meant the union of bankers and government.
Bullish!!!
You just beat me to it!
We're off and running today. Equities: Up. Oil: Up. Bond yields: Up.
Err - that last one may not fit the narrative, but oh well. You can have everything in life with the right amount of QE.
Get to work, Mr. Yellen!
Don't you mean Bullshit?
But all that extra savings from lower gas prices was supposed to be a boon to the poor fuckers who have no money. The recovery is just around the corner bitchez!
Which corner?
Lot of pot hole road 'fore we hit the corner.
Carry on, full throttle.
The corner of the cliff, that corner.
Welp, that did it, my morning laugh. Very funny. I hope you don't mind but, as Grouch Marx once said, I know a good joke when I steal one-so I'm going to lift this one.
Winning-er-est-ish..... Or the weather...
cnbc: bullish, not buying means plenty of money on the sidelines..vomitorium talking heads
What is this thing called 'Retail'?
folks bought some stuff, but not enough....
I can only afford one obamacare policy. Isn't that enough.
...or they returned a lot more of the illusory holiday spending "spree"...
Awesome! Keeps Fed on sidelines. Buy more stocks! There is never any bad news; it's only a matter or perspective!
Consumers are clearly saving their money for a February spending boom (or March or April...December). Has to be bullish because stocks are still higher pre market.
saving for IRS extortion..obuma care fines and no exemptions..with the damn printers why do they need my fiat bucks ..just go print them you will anyway..
Because if you have too many of them you may improve your life or the lives around you without thier "help". Can't have that.
Stepping back into the WayBack machine for a moment - Wasn't it Henry Ford who realized that if he wanted to sell cars, he would have to pay his workers a decent wage? Now, Back to the Future: No Jobs - No Wages - No Sales - No Profits.....DUH!......
Ah, great narrative ZH. However, did you notice in the detail it is all from retail gas sales. Same with the month before. Ah, well....that makes sense.
Queue the -1's........NOW.
what percentage of that drop is due to gas stations?
the other categories look mixed.
i say it's more muddling along than collapsing.
Wait until the emerging market countries start defaulting due to the low oil and low commodity prices. Its coming. Remember that country Venezuela their is a reason you hear nothing about it any more. Totally imploding.
yada....weather....yada...
The masses are waiting for all the "Going Out of Business" sales this year.
" Yes we can! "
Deflation = hoarding cash = drop in retail sales..........this isn't rocket science BOA!
Coming soon to a debt market near you.
stawks are bound to hit 18000 today and 2100 respectively.
there is no such thing as bad news, everything is great news for the economy. high oil prices r good , low oil prices r good, a bad retail sales number is good, as is a good one good, its all fucking good.
the fucking dax is up fucking 12 percent in 2015, can someone please fucking explain this shit to me?
Because when the Euro fails...the German stocks will be worth more than the Greek stocks...or Italians....when they bring out their own currency again
Next quarter when the weather clears up things will be better. This print is just noise.
Slide, surge, dump, plunge, splash, deflate, taper, quantitative easing, explode, crash .... is this market news .... or bathroom humour ?
The MSM only deal in headlines....so that is what they have to lead with.....but I bet they dig into this number..to help out Obama
There's always dumpster diving. Why pay retail for good stuff that businesses throw away?
http://www.wired.com/2015/02/high-end-dumpster-diving-matt-malone/
Before you hop-in to this lucrative profession (trash-picker), be aware that many more establishments guard their dumpsters with security cameras/motion-sensors and secure them with locks. Many establishments will call or threaten to call the police if they catch you at it, and you could potentially be charged with trespass or an ordinance violation. If you see items left for recycling, LEAVE THEM ALONE! However...
"...the Supreme Court ruled in 1988 that once an item is left for trash pickup, there is no expectation of privacy or continued ownership."
So as you're looking for mislayed soda-cans and slightly-damaged goods, you might want to keep an eye out for correspondence, photos, drafts of financial statements, etc., things that probably should have made it to a shredder but didn't.
You have to start at the bottom to get to the top.
We are just putting in a solid base.
The weak hands are being washed out and once the strong hands coalesce the ramp of retail rebound will ensue.
I understand that Wall Street is working on a High Frequency Cash Register with Pavlovian Overtones.
People are just loving that gas price dividend, aint they. Blowin' it all on Prada handbags & shit.
Obamawreck insurance is draining the last drops of wealth from the plebs.
Bullish! Good for at least 1000 pts!
Numbers, shnumbers. For me, when the sales of iPhones starts declining, then I will know the people have truly run out of money.
Definite GREEN SHOOTS!
Let EBTs go no limit for a month... Record Retail sales print..Winning!
Sure, blame it on Obamacare...whatever...
When are you guys going to get it through your thick skulls that the consumer is CHOOSING not to spend that money? It isn't being 'taken' by some other sector, they are KEEPING it.
That's right. There's no "tweak" that can be applied to correct the misdirection, because it isn't being misdirected...it's being KEPT.
And the sentiment causing that is un-tweakable. It's what you guys call a deflationary mindset, yes, it leads to the spiral, and your bloated economy begins it's long exhalation.
Oh, and that feel-ggod sentiment? It's not because they're getting ready to spend again. It's because for the first time in a long time, they see the possibility of some progress, and they'll hold onto those savings even more tightly, because it FEELS GOOD.
Better than spending.
One holds on to "it" when there is no interest rate providing a return to spend. Especially when they cant work or have a job.
BO... No consumer? let's wage war.
"When are you guys going to get it through your thick skulls that the consumer is CHOOSING not to spend that money? It isn't being 'taken' by some other sector, they are KEEPING it."
put the crack pipe down, there is no spoon (money) in the hands of consumers ... your bosses charts must be BS, still, everything is awesome - freakin' box o rox
now get back to tightening those shackles 'round grandmas neck, your break is OVER
No when a premium increases for something that you have to buy or pay a penalty for and that premium is more than whatever if any wage increase that you may of gotten your overall income is lower. If you are spending 1000 dollars less a year on gas but spending 2000 more on "health Care" you are operating at a 1000 loss. Now that only helps your statement about choosing not to spend because you know you are poorer and tighten up your spending even more out of fear.
We don't need sales...just borrow a trillion yen at zero and buy the market. All economic sanity is gone...it is now just stock market...with an economy attached
DOW 18000 TODAY!
DOW 18,000
DOW 19,000
DOW 20,000
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-
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DOW 36,000 - QE10
Do you think they would give it to me in 50 s?
I like Grant's portrait. Very flattering.
No problem,
any shortfall in retail spending can be offset by
increased Pentagon and Homeland "security" spending.
No wonder BO is tauting war.
More retail sales losses and higher unemployment is great for stocks!
QE4 is a 99% certainty.
Monetize the debt until it's 0.
The Federal Reserve wrote Japan's economic playbook.
USA = Japan.
Retail sales slide in 6 of the 13 categories....but not ALL of em! Better n expected, BULLISH!
"Retail sales ex-gasoline increased slightly."
in other news, tulip sales were up huge
The consumer knows at some basic level that there is something terribly wrong with our keynesian mega government TBTF schizophrenic banker controled economy. Same reason you can't find .22 ammo at the retail level 18 months after the gun control push. There is FEAR out there. Consumers have elected not to take their gasoline-pump rebate and buy new shit at retail. They're prolly paying down some debt or stocking up on supplies. This is a MASSIVE shift in consumer sentiment that is not being reported at all by the Bartiromo Bullshit team.
if they were stocking up on shit, there would be sales increases to report.
people are instead doing all they can to stay in the black. a drop in the cost of gas just saved them about a grand. overall, the cost of living skyrocketed over the last x years, and their pay hasn't kept up. do you think consumers think like that? Hey, i've got an extra grand to spend, i think i'll sign up for a $2000 dollar a year iTard plan. maybe some do, but i'm betting most americans aren't retarded. I think they have an income and they are trying to make ends meet, not out piling on more debt. unless we're talking about ninja car loans at GM. that's were the iTards flock to finance their unaffordable SUV's with spinners and 120 months worth of payments.
Not necessarily, I do most of my purchasing at Garage sales now simply because a Stainless Steel mixing bowl is a Stainless Steel mixing bowl new or "used". Why pay the premium. Now for New Tech yeah you have to buy new if you want the latest and greatest toy. For regular household items you don't usually need new. Now if your wife isn't a materialistic keeping up with the Jones's woman (dying breed) then you are probably doing great right now.
I LOVE garage sales! It is the ONLY way I 'shop'...
Well, except for things like food, gas, underwear...that sort of thing.
Although I DID buy eggplant at a yardsale once...and it was good!
Looks like an economy based on consumer consumption has its flaws, doesn't it? Do ya think?
the only correction I'd make is "a consumer economy BASED ON DEBT has its flaws".
what oter kind of economy is there? A manufacturing economy? That's China, India, Taiway, etc... and they're all imploding b/c the consumers aren't buying, and there is a glut of manufacturing competition.
How about a raw materials producing economy like Australia? They're imploding too, b/c china doesn't need the materials to produce the stuff that people aren't buying.
I think the issue is more about a debt driven fiat economy than the type of economy (consumer).
So, where is the CONsumer going to get the 'money' to CONsume if there is no underlying economy like manufacturing and mining, pray tell.
SNAP, EBT, HUD, EARNED INCOME, MinWage Jobs at retail, Nail Salons, Mowing Lawns... ?
debt.
1st requirement: The CONsumer must have the means to CONsume.
Remain Calm! We should achieve escape velocity starting in the second half of the year, or in early 2016, or late 2016, or early 2017, or 2018, or maybe in 2019.
Anecdotally I'm seeing this drop in retail big time around here. So a month after the holidays I was in the more popular mall and saw at least 10 stores advertising 30%, 40%, or even 50% off sales.
That's of course the stores that aren't outright closing like Radio Shack and Wet Seal, which really are boarding up, at least in that mall.
In the less popular mall with more "hood" characteristics to it, there are numerous and growing empty store fronts, looks like teeth busted out, and one major anchor store just left. The mall, keeping a brave face on it, says they will turn the anchor space into numerous smaller shops, but it will probably be a den of cheapness and most will fail there.
It seems even the prolitariate are showing signs that they understand something is wrong. A mere SIX YEARS after that became obvious, it's finally trickling down. The sunny headlines have done their job for years, but you can't fool all the people all the time (forever).
I've spent the last 6 years working to build up a small business, which is now quite reliable and profitable, often I was mocked by some less educated/less experienced folks for how hard I was working during those years. Now I'm going to reduce my work hours and enjoy something of my own very small cash cow stream-of-income, just as the prolitariate types are figuring out things just "might" be bad.
I KNOW they cannot do as I have done, and with government debt and food stamps already bursting at record highs, I think things are going to get ugly this year, and for quite some time to come.
To be fair after Christmas sales usually happen yearly to clear inventory.
Right now we are a little ahead of where we were last year. Like you I have been working hard getting things in check. Debt was my big one and at this point it is mostly gone. Not having those monthly payments will help immenslely if things really turn south. At first I'm thinking savings then expansion with the extra cash.
We taxe some folk!
Buy Stawks! There already up on all this good news!
I had CNBC on this morning when the numbers were released... not by choice, it is our default work channel.
Anyway, right after the release, Steve "the biggest toolbox on CNBC" Liesman was bumbling through the numbers and trying to suggest that it was probably a one-time anomaly.
Then, a few minutes later, Jim "the biggest market cheerleader in the known universe" Cramer came on and said that he "doesn't even pay attention to these aggregate retail sales numbers" (I am paraphrasing, but that was the gist).
So, good numbers are accurate and validate the bull market. Bad numbers are anomalies to be disregarded and revisited at a later date.
I'm buying more puts. We are reaching a fevered pitch.
Who is going out shopping in this shitty economy. The media should be the first ones against the wall for lying to everyone to protect this halfrican motherfucker.
Recession ended June 2009, enough said, move along pleb.
Someone posted this during the week, quality read.
http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
I'm glad ZH gets it. It isn't hard to understand when insurance goes up 3x in price for less coverage thanks to the big scam we don't have extra money. I'd be better off putting insurance payments into my own health fund. I'd be ahead of what my insurance covers within a year. This fucking pisses me off!
I also notice the same thing happening in all areas of insurance. Rate raises and cut coverage.
Where is the chart for ammo and gun sales (rakes and pitchforks) bet that had an uptick.....soon baby soon.
First time I've ever seen it...but I think all my red neck friends are expecting the whole thing to crash and burn on Obama's term.
Everyone is hunkering down, waiting for it.
when will the masses be learned?
taxes up, food up, medical up, taxes up again.
taxes and price fixing are ways to control the herd (forms of oppression) this will be your everyday news till you actually do something about it. Changes to world events in a good way come from the bottom up, the only thing you get from the top down is...fucked.
once again i will post a solution to all your woes.
Civil Disobedience.
"Withholding payment of taxes is one of the quickest methods of overthrowing a government"
Mahatma Gandhi
I'm not sure it matters to the market what the US consumer and labor force does - so much is off-shore and accelerating. F**k globalism.
Just like the US equity markets have been attracting capital flows because of lack of yield in bonds, a growing economy and good double digit return for past 5 years, the Dax is the same to Europe and Asian investors who want to be a bit closer to home.