Bank Of America Is "Confused" Why Retail Spending Refuses To Pick Up
One month ago, when looking at the latest Bank of America credit and debit card spending data, we presented something that the retailers knew all too well: US retail spending was plunging:
"in today's follow up report BofA reveals that if one goes off actual credit card spending - which conveniently resolves the debate if one spends online or in brick and mortar stores as it is all funded by the same credit card - the picture is even more dire. According to the bank's credit and debit card spending data, core retail sales (those excluding autos which are mostly non-revolving credit funded) just dropped by 0.2% in November, the first annual decline since the financial crisis!"
To be sure Bank of America desperately tried to mask the overall plunge highlighting one off factors (calendar effects, gas prices, weather) however now that it has released its latest data, it is running out of excuses, and as a result is confused, quite literally. This is the title of its latest piece looking at retail spending paterns based on its credit and debit card data: "Confusingly Cautious Consumer"
This is what it said:
Retail sales ex-autos, based on the BAC aggregated credit and debit card data, were unchanged in December on a mom seasonally adjusted basis. This is a sluggish end to 2015, which is in keeping with the year. As the Chart of the Month shows, retail sales ex-autos were only up 0.8% in 2015 based on the BAC card data and are on track to realize a 1.0% gain in the Census Bureau figures.
The internals were ugly. Here is retail sales ex autos:
BofA's take:
- The seasonally adjusted retail sales ex-autos measure from the BAC aggregate card data was unchanged on a mom basis in December.
- We think this is largely a payback from the gain in November. As such, smoothing through the recent monthly swings, we find that retail sales ex-autos on a three-month average inched up 0.1% mom SA.
- We expect a similar pattern with the Census Bureau data and expect the December data to come in weak after the strong gain in November.
Holiday sales were even worse:
The commentary:
"we find that holiday sales based on the BAC data were only up 1.1% yoy in 2015.... This is the slowest pace of holiday sales since 2011, based on the BAC data, suggesting that the consumer was cautious this year despite a supportive economic backdrop. Although it is hard to find a strong correlation with holiday sales and the next year's consumer spending behavior, we believe that the sluggish holiday shopping season in 2015 suggests caution about the consumer outlook this year.
Digging deeper into major spending categories, BofA found that the strongest growth in sales in December, when measured as a mom seasonally adjusted change, was restaurants and drinking places. Which would make sense: after all the US jobs recovery is now one of "waiters and bartenders." On the other end of the spectrum are sales at electronic stores and young adult/teen retailers. Both categories were down sharply in December relative to November, and have been trending lower through the year. As BofA notes, "we continue to see evidence of consumers prioritizing spend on activities and leisure rather than goods."
Finally, the most disturbing trend, one which we first flagged in October, is the ongoing deterioration at luxury retailers, a proxy for upper class spending habits. As the chart below shows, the trend is not your friend.
From BofA:
"Spending at luxury retailers has been declining since the peak in 2011. That said, growth is coming off of exceptionally high levels at the start of the recovery. Our consumer discretionary team suggests that higher income consumer discretionary purchases appeared to hit saturation in 2014/2015."
BofA's conclusion: "While we continue to look for a healthy job market to drive spending, we cannot help but be left feeling cautious."
What, not "optimistically" cautious?
As for your confusion, Bank of America, allow us to resolve it with the correct answer: soaring Obamacare costs, and record rents.
(9 votes)
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Already happening off the coast of California with the seals; the small food chain is dying and now the larger chain is dying.
Maybe, just maybe people do not like to have debt, and be debt slaves belonging to idiots who print the stuff out of thin air.
So maybe they spend their hard earned money to pay off debt instead of buyin Icrap (destroying debt money in the process)
And if there is some money left at the end of the month convert is to real money (destroying debt money in the process)
Welcome to the new paradigm shift
"Cautious" - the new synonym for "Broke"
... 65% of the country is FUCKING BROKE! "Cautious spending" has nothing to do with it you stupid turdburglars at BoA.
"turdburglar"- is that now officially on the McDonald's menu; I know they have been serving them for years. Oh wait, you said turdburglar not "turdburgers". Cheers to all.
Credit cards are very convenient financial instruments. However, I think some people are waking up to at least what they need to do, to keep from getting into trouble. Yes, have credit cards, but pay them off every month. Don't pay interest on that $5 latte you bought from $tarbucks.
FUCK BofA. They know the drill and it doesn't involve consumer spending.
Every intervention since 2008 has served to financialize the economy and benefit the very wealthy, and they don't spend all that much more money on a daily basis than the average Joe. At the same time, automation, outsourcing, and hiring illegals are deflationary for Main Street. Crony capitalism shenanigans like health care giveaways and wholesale real estate deals for hedge fund landlords are also putting the squeeze on. People think it's the government's fault, but it's not. The government doesn't care one way or the other, they are a puppet for the corporations. Corporate profits vs GDP is at an all time high today. The bankers and PE and corporations are doing great, this is exactly what they want. They don't exist to create jobs, they exist to maximize short term return to shareholders. That's easy as pie when you can borrow money for free. Trickle down economics is a lie. Their goal is to front load the rally, take money from the 401k suckers, sell the rally, and then come begging for even more free shit taxpayer handouts after the bust. All the while avoiding taxes. They know that we live in a consumer economy and this is not sustainable, but they don't care, they want to get rich quick and they're doing a great job of it.
"Trickle down economics is a lie." Yep, it is why it was coined by the Democrats and placed upon Reagan. Believe me I am not voter of Demoscrapes or Repuklicans; they are one in the same and a Monster at that.
weetail wooks to be in twubble.
What is there to figure out old people like me have everything we need. My wife gave me 3000 to spend on a gun for my 50th birth day. Long story short its been a month and I honestly can't think of a damn thing I need or want. We have 10lbs of gold jewelry if not more, she is Indian. I have 40 guns and 100,000 rounds of ammo and a reloader. We have 5 flat screens and new furniture because we combined 2 households recently. Its sad but the only things I desire are a ZO6 or Shelby CSX4000 series and I can't afford those.
Young people are broke because of college debt.
There no more confusion.
It is all a con. What BOA is confused about is why it is not working?
"It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Upton Sinclair
I farm. Our farm income will be down 40% from 2014 based on collapsing commodities. However, the price for farm inputs including feertilizer, seed and chemicals has remained the same, or gone fucking up. Only reiief is fuel. We have totally shut down all spending. I refuse to buy a single input for 2016 until something gives on these outrageous prices. Nitrogen prices should have collapsed the same as oil. You can only fight reality so long, and reality will finally win....unless you're a .01%er
Exactly what I have noticed; even the fuel is still a gouge..based on Brent the price at the pump should be around $1.50, but it is about $1.88 and if you use mid-grade or high-octane, then the % gouge is even greater. Your taxes are also higher at the local, state and federal levels and we didn't touch ObamaCareLess.
At least you got skills, land and the ability to sustain food; you are 99.9% ahead of the rest of us.
Farms are another industry in recession.
"Farms are another industry in recession."
That's what our Schedule F says, year after year........
I'd be happy to boost those retail spending numbers, just as soon as I get a fucking pay raise and .gov gets their greedy hands out of my pockets.
I'm angry as hell at these bastards.
Correction. .gov is holding your pockets open for their corporate cronies.
Well I just grabbed 10,000 for 300 dollars processing fee for 0% interest for 15 months unsecured.
Now I need to try to make money with it and after 15 months pay it off in full and keep the change. Other than silver gold, anyone have any ideas?
I have about 5000 cash I am tossing this on top of.. I already have plenty of pm and food ammo etc.
Are you serious? Buy 1 ozt of sovereign gold; that will be your payoff in 15 months, then buy 25 ozt's of sovereign coins (Maple Leafs), that is your bonus, buy some lead to protect the investment. Then wait for the VXX to hit 25 and short it 2-3 months out at $20 and have a good time.
IOW - do what you want.
short the fangs.
How about real inflation and shrink-flation and Obamacareless and higher taxes and price gauging on the utility bills, all utilities, and lower wages.
The American middle-class had/must be eliminated in order to usher in the One World Economic System or New World Order or Agenda21 or whatever you decide to call it. Good work Obama handlers; you have done well and take care of that foot wound; maybe a head wound is next??
So guess what the entire global economy is halting because the largest consumer is disappearing along with the second and third and fourth (Europe, China and Japan); who could have seen that? A blind man, that is who!!
Healthy job market????
FFS
They're not confused, just criminal.
Let's see.
1% rich
20% retired or near retirement
20% still reeling from mortgage crisis
20% paying student and car loans
20% getting ready to pay student loans
19% on full government assistance
I'm confused as to why the people let these f**king idiots control the money!
Economics Room 101 - D'oh - if the plebs have no money or credit to buy stuff because they are either not working or in low paid job - who is going tokeep the sales going. Are the NWO parasites going to turn into reformed Scrooges and ensure ordinarly workers are paid more?
Fat chance!
had a talk today with a small business owner in his store..he shocked me, when he said.".they took the money from the economy & kept it in banks balance sheet." the fed has made sure the money cannot be loaned.."
and they wonder why business is not investing and hiring?
They know, they don't care. it's a big fuck you to the American people and economy.
I’m starting to hear shear desperation in my customers voices when they are about to lose an order. My part of the quote is just a tiny portion of the total job they’ve spent months trying to secure, so I definitely understand how they feel. Our VP of Sales seems to think we’re responsible for the massive downturn in our economy but us peons in sales are just along for the ride.
If you don't mind me asking...what industry are you bidding in.?
"Our VP of Sales seems to think we’re responsible for the massive downturn in our economy but us peons in sales are just along for the ride. "
What a novel approach! Instead of berating the consumer for lowering purchasing trends, why not blame the sales staff instead!
I am spending. I just bought a Warbonnette XLC 1.7 hammock with Superfly and Hammock Gear polar zero top quilt and underquilt for winter camping....in case I can no longer afford the rent.
this is the beginning of a long trend. i talk to millenials in the family and their friends. conspicuous consumption is not as cool as it was for boomers. they are into repurposing old stuff. i have a niece who sources old cloth and turns it into high quality clothing. i know many people who shop garage sales and the internet equivalent for everything from lawn tractors to kitchen gadgets to clothes. because the old stuff is so much better than the new stuff. one example is the old hobart kitchenaid food processor. a 50 year old machine in good shape goes for more than it cost in old dollars because the damn things are impossible to break. i went through three lawn tractors before i bought a twenty year old john deere for a coupla hundred bucks which has already lasted longer than the brand new craftsman tractors did altogether.
more and more people know they have been scammed and the kids seem to know it from the start. the "trained" consumer is gradually throwing off their shackles and spending money on real sensory experience rather than things(turning buddhist?). you won't see the all the worthless crap the boomers had in their homes in a millenial home. the dumbfucks oversold it and now people don't give a shit about a fake 50% off sale.
that behavior is forced upon a good portion of the young population with fulltime jobs now at 30hrs/wk for a 25% haircut to wages but more jobs for bls and the bogus employment reports.
the genius' are scratching their heads wondering why no one falls for their bullshit anymore yet they still believe their buulshit is still effective. they killed the golden goose but we have to pay for it.
"conspicuous consumption is not as cool as it was for boomers. they are into repurposing old stuff."
Can you remember the good old days when the Goodwill and Salvation Army thrift stores weren't crowded?
we discovered goodwill 20 years ago when our first chikd was born. we went the shop in the most affluent area of town and bought whatever we needed, sometimes with the tags still on them, for pennies on the dollar. mind you, we could afford to shop in top tier stores and it took some effort to convince my wife but i prevailed and we have been doing it ever since for all our needs. i hate buying new depreciating assets. that was my motivation. as a hobby, i troll for cheap stuff that i can resell. i love the irony of old stuff being more coveted than new stuff for daily use. apparently the demand is good enough that goodwill stuff is expensive now. lol
When my wife and I married in 1987 we furnished our first house from the thrift stores. That old avocado green stove and refrigerator we bought for our kitchen lasted us for years! We had some of those thrift store furnishings for years.
They are "confused", huh?
Well, we don't want your shit. We don't want your cheap crap made overseas, we don't want your loans, your 'credit', we don't want to invest in your so-called 'markets' with the money we no longer have thanks to you.
You weren't content to reap your ill-gotten gains in the usual way...no, you had to double-down and put the grift on steroids...You weren't willing to wait for the eggs, you had to cut the damned goose open and take them all.
Mission accomplished. But now there will be no more eggs for you. Fuck off.
Does that make things any clearer? Can you hear me NOW?
Mencken wrote: 'Every normal man must be tempted, at times, to spit on his hands,hoist the black flag, and begin slitting throats.'
Standard Disclaimer: For BofA, I am engraving a baseball bat with the word "Obamacare"...
I love that Mencken quote...
Well all they have to do is look at what they pay their employees!
You have no customers because you ate all your customers.
As for your confusion, Bank of America, allow us to resolve it with the correct answer: soaring Obamacare costs, and record rents.
BINGO, BINGO, BINGO!!!!!!!!!!!!!!
Yep. As end of article states rent and healthcare. Plus Boomers retiring and downsizing Its going to have to finish crashing and burning for a fee more short years before it can get better.
I am pretty sure the Consitutional Convention will call for sound money and the debt will get a massive haircut. Some trade will rebalance. Perhaps a year or two after this point it will improve. So guessing five more years of hard pain.
The BofA is some stupid, theiving, muthfuggaz,,,period. Take this part of the explanation for the chart: "Digging deeper into major spending categories, BofA found that the strongest growth in sales in December, when measured as a mom seasonally adjusted change, was restaurants and drinking places." < < < Not exactly dumbasses but more of the social being needs to be examined here and quite frankly it's a simple concept. People gotta eat, they don't gotta buy a new tree to plant, buy the latest new gadget, buy new furniture, go to the movies, etc. They GOTTA,,,they HAVE TO EAT. And they've targeted eating three meals a day for a very long time. Going out to eat allows one to get out of the house and do something, relieves some boredom, enjoy a social setting, skip doing any dishes, represents a small reward of monetary exchange from the fruits of their labor. And in watching for specials many times they can eat out cheaper than they can at home. Eating is necessary for survival, consuming water is necessary for survival as some substitute whiskey or jucie or soda. When broke, people just strive to survive...
The Playboy mansion is up for sale, but the aged pervert Heffner is part of the raw deal that is overpriced at $200 million. The pervert in pj's purchased the mansion for $1 million 42 years ago, and invited Bill Cosby to lots of date rape parties in the grotto. News accounts say the mansion is falling apart and is run down. Heffner ain't producing Playboy anymore, and has obviously run out of funding for his perverse lifestyle. In brief, just as Hef is going bankrupt, so too is BofA, and all the TBTF banks due to their combined largesse, corruption, and lack of ethics.
die, die, die, America.
Yeah, I saw that. Hefner expects somebody to buy the mansion with his old ass still living in it. Topping it off, this is the guy who made a fortune showing tits and ass in glossy magazines, and now, he's announced that there will be no more T&A in his mag.
If I didn't know better, I'd start thinking Hef has Alzheimer's. Happily, I own lots of old Playboy magazines, which, like everything else, is better than the new stuff. The old ones show real T&A. The new Playboy only gives you a peek.
Boo, fucking, Hoo, Hefner. Old age sucks, don't it?
"In brief, just as Hef is going bankrupt, so too is BofA, and all the TBTF banks due to their combined largesse, corruption, and lack of ethics."
You have no faith in our government. The banks will never fail because barry & his friends in congress will simply terminate social security, medicare, military pensions, the VA, any any other useless eater programs they can find. By saving the money wasted on parasitic humans, those funds can be used to save the only thing that really matters to the government: The Banks (they are people too!).
My wife runs the family finances. She could explain in a few minutes why retail sales suck.
My 15 yr old has befriended a Mexican kid maybe 20 yrs old. He is going to buy a new $30k car and can't afford to insure it but the Mexes have a way around that pesky financial responsibility clause. We started in on him as soon as he brought it up but it fell on deaf ears. Fool <-----> money syndrome. Wife's friend was recently rear ended by a Mex in a new uninsured Camaro. Yay sub-prime auto loans. Time to double check my uninsured driver coverage.
A guy I know signed a non-disparagement agreement with BofA, so he can't say anything bad about them in an overt way, but he often says, "banks suck. All banks suck. And, for good measure, all banks suck donkey dick."
BofA independently made this otherwise reasonable guy hate all banks and go Galt. Now he lives in a shed near a creek and railroad tracks. I think he's on to something, but I just can't put my finger on it. Darn...