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The Legendary U.S. Consumer Is Out Of Cash In These Cities
Today Macy's dropped a bomb with results that were nothing short of abysmal, and which confirmed that not only the "legendary" U.S. spender, the driving force behind 70% of US GDP, but also foreign shoppers have hunkered down to a greater extent than at any other time during the so-called recovery.
Quickly the apologists said that this is not an indicator of overall consumer weakness as much as it is lack of retail strength: the argument being that more spending goes to online markets.
There is just one problem: if that were the case, one would see a pronounced deterioration in spending uniformly across US cities. However, not only is that not the case, but there is a very clear distinction in which cities US consumers are doing well, versus cities in which they have been tapped out.
We know this courtesy of Bank of America's latest credit and debit card usage data which showed a dramatic divergence among the top 10 US metro areas.
As the chart below shows, there is a very distinct slow down in spending in various cities such as Atlanta and Washington DC, both of which saw a sudden and unexpected plunge in retail sales in October compared to their prior 6 month average; sales in Houston on the other hand continue to weaken – the region has experienced essentially no growth in nominal sales over the prior six months. On the upside, the US financial centers, Boston and New York, were the strongest as one would expect.
So for those wondering where the US consumer is all spent out, look no further than the cities at the bottom of this chart.
It is not just cities, but states where the divergence is acute, but no one state has been as slammed as much as Texas. As a reminder, Texas is the first state which, due to the commodity crisis, we declared had entered a recession in April. Now, retail sales are on track to confirm this.
According to BofA, spending on BAC cards in Texas continues to weaken relative to the rest of the country. The bank adds that sales in Texas are up 1.2% yoy, down from a recent peak of 5.8% in August 2014.
Finally one last chart which shows that US consumers are running on fumes is a comparison of spending at supermarkets (indicative of eating at home for those who can't afford restaurants) and eating out, as observed from restaurant sales.
While the former has been in a steady decline over the past three years, it is only recently that we have seen a material drop in restaurant spending - traditionally an indicator of how the upper/middle class is faring. And while it is still up a solid 8% Y/Y, the downward inflection point in early 2015 is certainly problematic and also confirmed what we showed a month ago in "The High-End Consumer Is Rolling Over"
Bottom line: the "sudden" weakness in discretionary spending is far less about migration to online sellers (keep in minda Amazon's recent jump in profitability has nothing to do with its traditional marketplace and everything to do with its cloud product offering) as it is about the ongoing decline in the purchasing ability of the US middle class - thank Obamacare and the economy.
For decades it has been said that anyone betting against the (tapped out, healthcare insurance-crushed) US consumer, will lose that bet. Judging by the above data, this time may finally be different.
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this is what happens when you replace "legendary US workers and savers and spenders" with Mexican spenders they run out of cash.
Look at Bell CA (LA) 100 % immigrant, largest employer ABC school district and SEIU, they voted to liquidate their own assets, nothing left to sell but US citizenship. http://www.abajournal.com/news/article/city_of_bell_sues_its_former_bond...
Bell is 1.2 sq miles of LA County
Bell is now just an entry port for free shit, everybody works for the state liquidating assets, ask our senatorettes.
eCONomics 101
No money, no spendee.
End of lesson.
Class adjourned.
u raciss monsta
no money? Preposterous!
Print mo money!
No money no peas! No money no peas! No money no peas! No money no peas!
I get me sum mo money, I'll buy me sum mo peas!
Mo money, mo peas, easy as you puhleez...
See how easy it is to reform a free market saver to tax slave then to a full rights FSA member!
Because of health insurance premium hike letters. To be in-line with the shopping season. Maybe the gov statists should let begin the health insurance year in sommer.
Not me. I just got my cancellation letter, along with the "take this other insurance, it's only an 80% premium increase to $840 with a 450% deductible increase and oh by the way you co-pay goes from 0% to 30%".
So I sez, fuck this shit, ain't nobody got time fo that.
I now have a $1 mil medical on my auto ins, a $1 mil accident policy, a $1 mil catastrophic illness policy, all for $240 a month and a $1000 deductible no copay. Fuck them, I'm not forking out. I now gots me some extra bucks to spend !!
I am sure your doctor still accepts cash... Like the saying goes - no one turns away money and just pay the Obamacare penalty.. For every $100,000 it is only $2,000 if you can't find something in the ACA that qualifys you for a waiver
Ohhh not it isn't, if you refer to IRS "fees" on non carriers. There lurks an approx. 14K personal penalty, and businesses, even very small ones can get a 36.5K penalty (hundred bucks a day) if they go afoul...
maybe it looks better this way:
possible $14,000 penalty a year on personal taxes
possible $36,500 penalty on businesses
.
has anyone yet been able to keep their insurance? I know of nobody that has...
I'm not sure what is being talked about in regards to Macy's here as I just saw a headline that says:
Macy's beats 3Q profit forecasts
So which is it? Amazing how media outlets can take headlines and spin em any way they want.
I was in Macy's in Boulder, CO last week. Huge floor of clothing display. Two older ladies looking for bargains but not selecting any purchases. About eight staff members with nothing to do.
Los Angeles is 70% Latino immigrant renter making $15 an hour or less (less taxes)
Their capacity for buying nice stuff is pretty much limited to a new Iphone every 3 years and clean underwear and millions more Syrian refugees aint gonna fix their income.
And Donald Trump says American wages are too high
Yes,
Trump and Carson say wages are too high for no-skills jobs because we need entry positions for our young people. The adult immigrants can go back home.
I hired a Penn State graduate a little while back. He was top of his class, worked as an intern, etc. ... he was useless, i had to train him to do everything other than turning on the computer... all he wanted to do was look at his phone. 49K a year wasn't enough for him. He was too expensive at minimum wage prices, i danced when he left (was about a month from getting involuntary job change...documentation is hard at times, but not when they take 4 weeks of vacation in 5 months...unannounced and unscheduled btw)
It could have been for either drug rehab or court ordered restitution due to something "alcohol related" (DUI, a fight where he either beat or stabbed someone and got a felony aggravated assault charge reduced to misdeamenor ) rehab due to the "opiod" (better known as heroin) epidemic where now anyone who is caught with xxxx numbers of heroin baggies or percoset pills automatically gets rehab paid for by the state)
Thats not correct. He said YOU make too damn much money!
Don't worry, the Fed is about to start printing a bunch more $.
https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...
Ok, but we're talking here about minuscule reductions, 1% or so....
When leverage is a factor 1% can kill you overnight.
Debt saturation is a bitch.
Bring back those 100% plus LTVs. Fog a mirror loans.
Housing bubble #2 worked ok, not as good as the orginal though.
Fed is good at bubble blowing.
But stocks is making us all rich
You obliquely nailed it right there.
In October, the working people in Houston and Dallas could see their 401(k)s taking hits. The price of oil and gas dropped more. The newspapers, radio stations, and TV stations all reported on layoffs and the potential for more pain in the oilpatch. Pretty much everybody in Texas knows someone in O&G. The level of awareness does not inspire increased free spending.
Oil and Gas jobs or Food Service jobs... we have now only one leg to stand on.
Largest aggregate coincides with short term thinking of CB. Let them chase the dollar, and run for their money like indentured servants working for piece work pittance. When they realize that they are spending more energy than they are consuming they will head for the hills en masse and lockdown their bug out bunkers.
Spending in restaurants is falling.
Spending at supermarkets is falling.
Consumption of food is falling.
Good thing so many Americans have stored up a good layer of fat.
Have no fear, Captain Credit is here! Just in time for your holiday splurging. http://www.businessinsider.com/financial-advisor-insights-november-5-201...
When the restaurants start laying off, and stop hiring, the idiots that compile employment figures will surely be in a jam.
I wonder how now with 5% unemployment (which is much lower in the top MSA's in terms of retail sales) restaurants can even find people to hire -- same with retail stores --- I mean is Amazon really going to find 100,000 people willing to work for $12 an hour in a warehouse knowing that after Dec 26 they can be fired in a NY minute??
Lets be generous here and assume that retailers & restaurants are paying between $15 - $20 an hour in NYC & Boston (the top MSA's).. even at 40 hours a week that won't get you a one bedroom apartment.. You can move 'further out' but then you are dealing with commuting expenses -- gas, wear & tear on car (a simple oil change full synthetic & alignnment which is absolutely essential every 5,000 miles max costs over $100.. any suspension problem caused by these shitty streets you are looking at $1,000 spent easy)... I don't know how these people do it especially when 22% -25% of gross pay gets taken out for taxes.
So with 5% unemployment (with most jobs since 2014 FULL TIME which is confirmed by the BLS statistics) who is going to work in a restaurant or retail job which most professional employers automatically dismiss to the point where the time is better spent looking for a REAL job)
People in that income class aren'T thinking much past Christmas anyhow. So yes, many will work there knowing it is seasonal. However, I've noticed many service industry workers in and around high cost of living areas are now foreigners with work visas. They ride the bus, or carpool with others in a shitbox wagon. Not a Mercedes S Class that "requires" inflated maintenance costs.
FYI, full synthetic engine oil on a 5000 mile oil change interval is defeating the purpose of synthetic oil. Also, alignments aren't needed every 5000 miles. It needs an alignment when the steering starts to pull.
Sevice workers, that own cars, drive shitbox 15+ year old compact cars that are falling apart. They don't change the oil, add oil, or any other maintenance. They drive it until it quits, have it towed to the nearest "buy here, pay here" used car lot and roll that old note over to their next shitbox car they pay 5 times too much for. That's how they do it.
The smarter lower income people have moved to North Carolina already.
1oz Silver American Eagles €12 @ EurGold
https://www.eurgold.eu/silver/silver-coins/american-eagle-1oz-silver-coi...
That's only a 1.5% range from Boston to Atlanta. Which I would say is within any monthly six sigma for averages. What do each of the last 12 months per city look like? This is horse feathers.
Healthcare costs now drive the GDP...
Sounds like a Santa Claus rally coming.
do most all my shopping online, free shipping to the door, stopped going to restaurants and just bare necessities from grocery store, cook at home, go to the farmers market, ferment and make own yogurt and cheese, etc.
. . . ferment and make own yogurt and cheese, etc.
For less than $100 a person can get the essentials to distill ethanol to make their own auto fuel. Any waste carbohydrate (potatoes, beets, old doughnuts, etc.) or any sugar containing substance can be used as the starting material. You can either mix the alcohol with gasoline (anywhere from a 30/70 to an 80/20 ratio - 80/20 is the mix used in "gasohol" sold at gas stations) or even run it straight if you have a "flex fuel" vehicle.
Also, something the car manufacturers don't want people to know is that non-flex fuel vehicles will run just fine on alcohol/gas mixes as high as 80/20 - the only negative thing that happens typically is the "check engine" light will come on (because the oxygen sensors in the exhaust detects too much oxygen in the exhaust stream - the idiot light will go back off as soon as you run regular gas again) and a slight decrease in gas mileage (alcohol has less energy per unit than gas). And all those people claiming that the ethanol will degrade the seals and other rubber parts in the fuel system are full of shit - it doesn't. By making my own supplemental alcohol fuel I am saving at least $100/month in fuel costs. There are plenty of sites that cover this issue . . . check 'em out.
"Also, something the car manufacturers don't want people to know is that non-flex fuel vehicles will run just fine on alcohol/gas mixes as high as 80/20 - the only negative thing that happens typically is the "check engine" light will come on (because the oxygen sensors in the exhaust detects too much oxygen in the exhaust stream - the idiot light will go back off as soon as you run regular gas again) and a slight decrease in gas mileage (alcohol has less energy per unit than gas). And all those people claiming that the ethanol will degrade the seals and other rubber parts in the fuel system are full of shit - it doesn't. By making my own supplemental alcohol fuel I am saving at least $100/month in fuel costs. There are plenty of sites that cover this issue . . . check 'em out."
Tell that to the thousands of folks that "inadverent stations" put JUST 80/15 into the storage pump tanks(that were sposed to be 90/10), and how many thousands of $$$ they had to pay out of pocket for severe engine damages.90/10 is the only safe mix unless your running a hybrid/gas engine.
Personally IMO they sould stop using ethanol period into gasoline.
Doesn't make a damn bit of sense to use food for fuel.(not when we have a worldwide glut,and meat costs are OFF the CHAIN.)
The costs of of our food decreasing v.s fuel without Ethanol would far more than make up for it.
Tell that to the thousands of folks that "inadverent stations" put JUST 80/15 into the storage pump tanks(that were sposed to be 90/10), and how many thousands of $$$ they had to pay out of pocket for severe engine damages.90/10 is the only safe mix unless your running a hybrid/gas engine.
The big oil companies would love you as a spokesman because that kind of information is exactly what they want people to believe about using ethanol as a primary fuel. As a licensed auto mechanic I can tell you that while there are reports of people having problems running alcohol if it is done properly by starting out at low alcohol/gas ratios there won't be a problem. For one thing almost ALL regular gas produced in the USA has at least 10% ethanol in it (check the pump next time).
As far as having to have a "hybrid/gas engine" that is incorrect. The only difference between a "flex fuel" engine and a regular engine is the injectors are timed differently when running ethanol. The claims that different seals and rubber parts are used in the flex fuel vehicles has recently been found to be total BS. People have taken the fuel systems apart and found the exact same materials are used in both vehicles - the only difference being different part numbers.
To start using alcohol in a regular engine you have to slowly increase the percentage of it in the fuel mix and monitor your engine for problems. Also, the reports of people having to pay thousands of dollars to get their cars fixed from running gasohol are pure bullshit - again, this is more propaganda than reality. In almost every case where something like that occurred it was because of water contamination of the fuel.
I have personally been involved with at least 10 people/cars switching over to high alcohol/gas mixes and to date have not seen a problem yet. If you are concerned about the risk, however unfounded it might be, that alternative is probably not for you though.
Monsanto and Syngenta may have an issue with the idea of dropping ethanol.
Sounds complicated and time consuming.
Personally, I care less about fuel mileage. I guzzle 13 - 15 mpg and don't even look at the pump price.
But, I remember back in college, I would just consolidate my trips and SLOW DOWN to save on gasoline.
Sounds complicated and time consuming.
I guess it is all relative when it comes it being complicated and time consuming. As far as it being complicated, it's not at all (the same vessel is used to ferment and then distill). To run a batch of 10 gallons of 95% alcohol takes 7-10 days, depending on the feed stock used. Since i have more time on my hands than money the effort is well worth it. If (or when) gas becomes really expensive or hard to get it also seemed to me to be a good skill to have.
If you don't worry about the cost when you fill up a vehicle (like a PU truck) that gets 12 mpg then we are really coming from opposite universes when discussing this though.
Seems like a waste of time, with gas being so cheap now. 10 gallons per week is only worth 10-20 dollars. A buck or 2 a day.
But it would be a good skill to have. During an emergency/reset, you would be in a good situation. Neighbors coming to you to fuel cars, generators, lamps and heaters. Also, it's an antiseptic. You could trade fuel for other essentials.
"Quickly the apologists said that this is not an indicator of overall consumer weakness as much as it is lack of retail strength: the argument being that more spending goes to online markets."
I wonder why Macy's and these other retailers haven't thought about selling their products online?
Austin is not mentioned. All the libs in TX are over pricing their homes and going to hold the bag when the time comes
Keeping Austin Weird, don't cha' know.
Austin, Cedar Park, and the surrounding environs will be holding the bag then the water runs out. The good folks in Leander ISD seem to think the local population can grow exponentially without water becoming an issue. They are already into capital appreciation bonds.
Supposed to be a good school district in a nice place. Wouldn't live there if you gave me the house. Couldn't afford the taxes.
This is humorous, Texas and Texans are out of cash?.ROTFLMAO(some are for sure, not in my neck of the woods)
My ass,I cannot even get an estimate for a new fence, it took me a month to get a new install on a roof,they have SO much work they do NOT want to even give estimates anymore.
And do not even think of getting a DEAL.
As a retail business owner in an upper middle class town in the north east I can say I havent seen anything this bad since the summer and fall of 2008.
Which 'Upper Middle Class" town in the northeast are you located in ?? Areas around Boston that are considered upper middle class (Belmont, Lexington, & Winchester) for example are booming. Same in the NYC suburbs of Westchester & Long Island (even with 5 figure annual residential property tax bills)... Do you mean somewhere in northern Maine near the Canadian border?
That's because we've totally ran out of things to buy. khols cash and Macy's coupons aren't even any good if we don't need anything.
I hear pawn shops are the next big wave.
We will be spending less and refuse to get in debt as much as it is within our control.
Teas is a big sanctuary state full of Texas sized sanctuary cities..no surprise.
Sure, but Houston and Dallas are two of those cities.
Then again, illegals tend to be unbanked so pay cash. BOA does not get to capture their activity.
Visited Dallas last weekend. Saw several "tent cities" under the freeways.
YU-ASS people don't need STINKING CASH!! They have CREDIT CARD's!! Woooohoooooo.... YU-ASS FUCKED YEAHHHH...!!!