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Big Retail Sales Miss In Longest Collapse Streak Since 2008 Recession, Confirms US Consumer Zombification

Tyler Durden's picture


Today's advance retail sales for June was simply abysmal, printing at -0.5% on the headline, and -0.4% ex autos. Expectations were for a print of +0.2% on the headline and unchanged less autos. Gas was not the culprit either as ex autos and gas the miss was -0.2%, on expectations of a +0.2% print. This was the third consecutive drop in a row: the longest since December 2008, when the US economy was flat out imploding. Expect furious Q2 GDP revisions imminently once the sellside community plugs this number into bean counter abaci. Goldman will likely cut its recently downgraded Q2 GDP from 1.3% to 1.1% or even sub 1.0%, which is essentially stall speed. Finally, today's number confirms our biggest worry: the spike in May consumer credit was not for discretionary purchases: it was for staples. Do the math. Finally, building material & garden eq. & supplies dealers down 1.6%, the biggest sequential drop aside from gas stations. At least housing has "bottomed." Of course, EURUSD spiking on expectations of more imminent NEW QE.




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Mon, 07/16/2012 - 08:43 | 2619732 oogs66
oogs66's picture

food stamp shortage :)

Mon, 07/16/2012 - 08:46 | 2619742 i-dog
i-dog's picture

"Sentient beings say the US Economic Recovery is yet to show a pulse"

"Economists say all is well".

Mon, 07/16/2012 - 08:57 | 2619762 MillionDollarBonus_
MillionDollarBonus_'s picture

What this article doesn't take into account is that retail sales are now completely manipulated. How can you just talk about "retail sales" without mentioning our Federal Reserve's tightening, or the fact that banks refuse to lend? These are all factors which comlpetely distort retail sales, and prevent them from reflecting true aggregate demand. Sales would be far higher if people could get access to the credit they deserve, but without help from our Federal Reserve and congress, aggregate demand cannot reach a natural equilibrium.

Mon, 07/16/2012 - 08:58 | 2619774 buzzsaw99
buzzsaw99's picture

Outright lies? Shame, shame, MDB.

Mon, 07/16/2012 - 09:00 | 2619782 Jim in MN
Jim in MN's picture

Indeed, with infinite wants, and sufficient credit, there would be no limit on aggregate demand!  Bullish for castles in the sky.

Mon, 07/16/2012 - 09:24 | 2619883 aerojet
aerojet's picture

LOL, I don't think most people on here are smart enough to understand your humor.  It was subtle, but "if people could get access to the credit they deserve" was the tell. 

I think retail is humming along fine, it's just not what the retail industry wants the numbers to be.  How dare Americans consume less and balance their budgets!

Mon, 07/16/2012 - 10:26 | 2620102 TheCanadianAustrian
TheCanadianAustrian's picture

Secretly, he's raging over his keyboard saying "What the HELL do I have to say without the use of wimpy /sarc tags to get these people to realize that I can't possibly be serious?!? AHBRLARGBLARGBLAR"

Mon, 07/16/2012 - 10:37 | 2620140 Freewheelin Franklin
Freewheelin Franklin's picture

Yes. He got me last week. Someone needs to put a bell around his neck, or a  [sarc] tag next to his screen name.

Mon, 07/16/2012 - 14:53 | 2621178 smiler03
smiler03's picture

He got you last week?? You've been at ZH for more than 2 years and he got you? Amazing.

Mon, 07/16/2012 - 08:45 | 2619733 BudFox2012
BudFox2012's picture

This should surprise no one.  I know my recent credit purchases have all involved bean, bullets, or bandaids...

Mon, 07/16/2012 - 08:44 | 2619737 The Duck Stops Here
The Duck Stops Here's picture

"the spike in May consumer credit was not for discretionary purchases: it was for staples. Do the math." Oh Snap!

Mon, 07/16/2012 - 08:46 | 2619740 MFL8240
MFL8240's picture

Hope and Change worked well as did QE and twist.  Kenysian economics DOES NOT work, we will now bite the bullett with almost 16 Trillion in debt and no country on this planet will deal with us.

Mon, 07/16/2012 - 08:46 | 2619741 Randall Cabot
Randall Cabot's picture

Calm down, calm down, Bloomberg is reporting that the hot weather is keeping consumers home.

Mon, 07/16/2012 - 09:05 | 2619813 duo
duo's picture

When food doubles in price, that should help retail sales?

Corn may break through $8/bu this week (maybe tomorrow).  Wheat up big also.

Is the $10 six-pack of Bud (made from rice and corn) possible EOY?

Mon, 07/16/2012 - 09:56 | 2619993 Spastica Rex
Spastica Rex's picture

Beer isn't supposed to be made out of rice or corn.

Mon, 07/16/2012 - 10:42 | 2620152 Freewheelin Franklin
Freewheelin Franklin's picture



No German purity laws here, bitchez.

Mon, 07/16/2012 - 11:13 | 2620258 BooMushroom
BooMushroom's picture

And sausages are not supposed to be made of mechanically separated, processed chicken.

But if you want to sell dollar beer and hot dogs, that's what you sell. Hard to draw people in with $4 Guiness and $4 bratwurst, even when both the taste and quality are clearly 4 times better.

Mon, 07/16/2012 - 11:16 | 2620274 Spastica Rex
Spastica Rex's picture

Yes - must have money left over for the important things like filling up the F350 King Ranch Edition.

Mon, 07/16/2012 - 11:30 | 2620321 Overfed
Overfed's picture

LOL. Yesterday I saw an F350 King Ranch, duallie, with the Harley Davidson trim package. No tow hitch or fifth wheel.

How small does a guy's dick have to be to plunk down $50K+ for "privelige" of driving around in something like that?

Mon, 07/16/2012 - 08:46 | 2619743 scatterbrains
scatterbrains's picture

Once they execute their smash and grab in the gold market I expect credit card purchases to spike (at least I'll be contributing).. thinking maybe 1300ish or so for the blue light special.

Mon, 07/16/2012 - 09:07 | 2619821 ltsgt1
ltsgt1's picture

Only the unsophisticated communists do smash and grab. We here in west do stealth confiscation, we are civilized.

Mon, 07/16/2012 - 09:44 | 2619840 Winston Churchill
Winston Churchill's picture

Chairsatan speaks on Thursday to Congession Finance Cmttee..

Gold raid for sure,its happened the last four times  he spoke.

Mon, 07/16/2012 - 08:46 | 2619744 apberusdisvet
apberusdisvet's picture

Now factor in channel stuffing in autos and the number is much, much worse.

Mon, 07/16/2012 - 08:46 | 2619745 Jlmadyson
Jlmadyson's picture

Recession fully back on the table for the talking heads. Not gonna like that.

Mon, 07/16/2012 - 08:48 | 2619746 Meesohaawnee
Meesohaawnee's picture

Kenysian econ works when the lone goal is to pump markets up to get a president re elected. Not saying he will but if the market traded at reality it for sure would not.

Mon, 07/16/2012 - 08:50 | 2619750 Jlmadyson
Jlmadyson's picture

Indeed. They have already admitted the market is 50% bloated from easing.

Mon, 07/16/2012 - 09:03 | 2619796 Everybodys All ...
Everybodys All American's picture

Kenyan econ ... fixed it. It would be funny if it were not so true.

Mon, 07/16/2012 - 08:52 | 2619747 yogibear
yogibear's picture

Time for Benny Bernanke and the Fed to print more, the US deficit to target $20 trillion and higher. Cash for consumer time.

Banksters have saturated the economy with debt.

The banksters built an economy on spending and debt rather than savings and investment.

When the deficits are no longer maintainable is when the can-kicking stops. Until then, watch the deficits and the BS build.


Mon, 07/16/2012 - 08:58 | 2619773 youngman
youngman's picture

"The banksters built an economy on spending and debt rather than savings and investment"

This is the exact opposite of what my father taught me..he was alive during the Depression....he hated bankers and never had a loan the rest of his life.....always saved for his purchases...

Mon, 07/16/2012 - 09:11 | 2619829 GMadScientist
GMadScientist's picture

All by themselves, huh?

Why does that debt need to be paid? Seems, I dunno....odious, given the false pretenses presented by the banks to markets around the world and all. ;)

Mon, 07/16/2012 - 11:02 | 2620220 aerojet
aerojet's picture

They did this because it was their ticket to control.  It's like the crack dealer giving out free samples until he has you hooked.  It was easy to make the case for massive debts and now look where we are!  And no political figure will do anything substantial about the problem, so that means the hard landing is inevitable. 

Mon, 07/16/2012 - 08:49 | 2619748 Joe Davola
Joe Davola's picture

Would have been much worse if not for my wife and kids.

Mon, 07/16/2012 - 08:59 | 2619780 pepperspray
pepperspray's picture

Wife and I bought a new Civic in June. Put down the same as we did 5 years ago for the 07 Civic and the payments are exactly the same today. No inflation?

Mon, 07/16/2012 - 10:45 | 2620164 SoCalBusted
SoCalBusted's picture

payments are the same != cost is the same

I think you are missing a few variables in your comparison, even when the down payment is the same.

Mon, 07/16/2012 - 11:42 | 2620364 aerojet
aerojet's picture

I'm not sure cars are a good measure--we're seeing the most price increases in goods that are necessities.  The prices of tvs are flat to negative, other durables are steady, cars, who knows?  A new car is not a necessity.  The .gov tried to run new car prices back up by squeezing the used market with the misguided Cash for Clunkers deal, but that sugar high is wearing off, obviously.  I guess my household "needs" one new econo-box type car, but instead, we're going to just keep driving (and fixing) what we have for another year or two.  I fix my own cars, so I'm already a weirdo in the US, anyways.  All I'm saying is that auto manufacturers are really feeling the squeeze as Americans continue to tighten their belts. 



Mon, 07/16/2012 - 08:52 | 2619749 buzzsaw99
buzzsaw99's picture

J6P cashed out his 401K to buy beans.

B. Biggs bought the big one I noticed.

Mon, 07/16/2012 - 11:46 | 2620379 aerojet
aerojet's picture

That's a theory, but no substantial proof exists to back it up.  The people in trouble right now are the ones who didn't have 401Ks to begin with, so I'm having a problem even humoring you. 

Mon, 07/16/2012 - 08:50 | 2619751 lizzy36
lizzy36's picture

WHAT.....but i thought lower gas prices meant that consumers would buy more crap that don't need with money they don't have.

Seriously, the number of "sale" emails i get daily and the level of discounting, foreshadowed this result.

Mon, 07/16/2012 - 08:56 | 2619768 BudFox2012
BudFox2012's picture

No kidding, glad to hear it's not just me.  I have to water cool the microprocessor in my computer just to keep up with the work my spam filter is doing the last month or two...

Mon, 07/16/2012 - 09:02 | 2619797 GMadScientist
GMadScientist's picture

Yup. The sickly sweet parfum of desperation drifts in the air alright.

Definitely has that, "Please God help me make this quarter" vibe.

Mon, 07/16/2012 - 09:46 | 2619961 roadhazard
roadhazard's picture

People know oil will come back up to ridiculous levels at the first cool breeze. With the corn crop failing food prices take the place of "cheaper" oil. At this point there are no more "savings" only less demand as America goes deeper into financial coma. 

Mon, 07/16/2012 - 10:01 | 2620012 Spastica Rex
Spastica Rex's picture

I would like to see a chart showing the history of gasoline prices preceding presidential elections.

Mon, 07/16/2012 - 08:51 | 2619752 Duke of Con Dao
Mon, 07/16/2012 - 09:05 | 2619810 GMadScientist
GMadScientist's picture

Maybe they're taking Mitt at his word and doing their part to halt the flow of Chinese goods through Walton stores the only way that will work: not buying them.

Mon, 07/16/2012 - 08:52 | 2619753 Randall Cabot
Randall Cabot's picture

Yikes! They even revised May down!!

Mon, 07/16/2012 - 08:52 | 2619756 jtmo3
jtmo3's picture

You silly people. Bad is good and good is gooder. Futures to turn green with a green day ahead.

Mon, 07/16/2012 - 08:53 | 2619759 q99x2
q99x2's picture

Close Staples.

Mon, 07/16/2012 - 08:55 | 2619764 Roland99
Roland99's picture

The drought is more than just lack of rain.


Mon, 07/16/2012 - 09:01 | 2619786 GMadScientist
GMadScientist's picture

In this case it's a clan of beavers upriver (pun originally unintended, but allowed to stand once recognized).

Mon, 07/16/2012 - 08:56 | 2619769 quasimodo
quasimodo's picture

I'm going long Staples!

Oh wait, nevermind....

Mon, 07/16/2012 - 08:57 | 2619770 Zola
Zola's picture

Now if only Obama could have all his lemming followers become entrepreneurs, the economy would be revitalized !! See its SOO EASY !! Any idiot can be a successful entrepreneur ! At the end its not the individual brilliance that matters but the COMMUNITY ! These evils capitalists tsk tsk ... they just dont see the good of the collectivist mentality !! THe solution is so simple, its right under their nose !!

Mon, 07/16/2012 - 11:18 | 2620281 Spastica Rex
Spastica Rex's picture

Thanks, tiger. GRRRRRRRRRRRRR!

Mon, 07/16/2012 - 08:57 | 2619771 Meesohaawnee
Meesohaawnee's picture

never fear. Ben will get on the bat-phone and make sure  the algos print the SP a 1360..cant wake the sheeple up and the their panties all in a bunch

Mon, 07/16/2012 - 08:57 | 2619772 Jim in MN
Jim in MN's picture

Well at least Big Brother is busy keeping us demoralized with their new 'we know where you are and we will text you when we feel like it' program:

Do I have a choice about receiving the alerts? You can opt out of the AMBER and weather alerts but not Presidential Alerts.

How do they know which alerts to send me? The emergency alerts will be location-based, so you'll receive alert texts appropriate to your current whereabouts. GPS isn't necessary; you'll receive alerts from whichever cell-phone tower you're closest to.

Will I be charged to receive alerts? According to CTIA - The Wireless Association, you will not be charged. The alerts are similar to text messages, but "Wireless Emergency Alerts use a different kind of technology to ensure they are delivered immediately and are not subjected to potential congestion (or delays) on wireless networks," says the agency.

Mon, 07/16/2012 - 09:00 | 2619783 GMadScientist
GMadScientist's picture

I got one that said, "Look up and smile!"

Mon, 07/16/2012 - 09:19 | 2619861 EvlTheCat
EvlTheCat's picture

I got one that said, "You forgot to wash your hands!"

Mon, 07/16/2012 - 09:19 | 2619863 TideFighter
TideFighter's picture

You are no longer a citizen, you are an "aquired target"

Don't go for the Big Gulp, it will be messy

if you're an old dying fart, your end-of-life care will come from above

Push the wrong button, mark the wrong circle when voting, then risk going to your car (boom)

Sneak into a gentlemen's club, your wife gets an instant photo

oh, the possiblities are endless

Mon, 07/16/2012 - 10:55 | 2620197 Winston Churchill
Winston Churchill's picture

Your fly is open.

Mon, 07/16/2012 - 09:14 | 2619839 Mitzibitzi
Mitzibitzi's picture

Can I opt out by leaving my damn phone at home? Currently, yes. However, the world moving to a cashless economy will soon make carriage of your cellphone essential. We realise this may sometimes be inconvenient, for example - in the swimming pool, so Phase 2 will replace the phone with an embedded microprocessor and wireless device. Phase 3 will enhance this system with the addition of a wireless receiver linked to a bone-conduction speaker embedded in your mastoid process, ensuring that important Government messages are never missed.

Mon, 07/16/2012 - 09:01 | 2619787 slaughterer
slaughterer's picture

EUR/USD going to feel some repatriation love at the bell. 

Mon, 07/16/2012 - 09:05 | 2619814 GMadScientist
GMadScientist's picture

Vomit Comet.

Mon, 07/16/2012 - 09:10 | 2619828 ptoemmes
ptoemmes's picture

A box of 25,000 standard staples is $5.49 at, well,

I wonder why no staplers or paper?!  Guess I better get me some before there's a shortage.



Mon, 07/16/2012 - 09:13 | 2619835 XtraBullish
XtraBullish's picture

Now reading Charles Ferguson's "Predator Nation" and if you want to read a wonderful synopsis of just how corrupt governments have become, grab it. The Fed, the Bank of England, and the ECB are all in one giant Ponzi-Circle-Jerk that can only end very badly.

Mon, 07/16/2012 - 09:21 | 2619874 Euro Monster
Euro Monster's picture

Wow... Unexpectedly!

Mon, 07/16/2012 - 09:22 | 2619877 ejmoosa
ejmoosa's picture

Many of us understand what has been done to larger companies via overregulation and government restrictions.


How much of retail sails is now being impacted by a lack of new and innovative products NOT moving from the mom and pop businesses(because they can no longer even get a start) because they have also been squeezed out of the equation for so many years because of overregulation and government regulations?


Choked off in both directions.



Mon, 07/16/2012 - 09:47 | 2619963 sumo
sumo's picture

This is satire, right?

Consumers are broke, jobs are disappearing or turning into part-time positions, the banks keep stealing from the 99% via hidden bailouts, thanks to the Fed and Fuckhead Geithner.

WTF are you talking about? Oh wait, you're giving us one of the Red team/Blue team clown acts, the daily official narrative from Robot Romney Central.

Man, that's so tired. Go sell that brand of stupid somewhere else. Fucking bankster puppet.


Mon, 07/16/2012 - 12:18 | 2620489 ejmoosa
ejmoosa's picture

WTF are you talking about?

Government hates corporate profits on the one hand, and your kids cannot even run a lemonade stand without government intervening.

That's what I am talking about.

Entrepreneurs cannot even get started today before the are regulated to a halt.


And you wonder why there is nothing in the stores to drive sales higher?  


That's what I am talking about.


And forget that dialogue about consumers being broke.  They have plenty of money for whatevever they REALLY want.  They just do not want any of what is being offered, and the rest of you are wondering why.   





Mon, 07/16/2012 - 09:51 | 2619979 adr
adr's picture

The only companies that can create new products are the large corproations. It isn't worth it for an individual trying to create a new product. Without massive connections you will never get in front of a retail buyer. If by some miracle you do, you won't be able to produce your idea for a price that is acceptable.

Base margin for mass retail is 55% plus at least 6% for add-ons like advertising allowance, defective product, etc. That means if you have a $10 retail item the mass retailer will want to pay $3.80. You better know somebody in China. Oh, you better also have a line of credit up to $2 million for purchasing inventory and you won't be apid for at least six months from the PO date.

You may want to try to impress the "As Seen on TV" Jews. But, they are more likey to steal your idea and the margins are even worse. They work on the Happy Meal principle. A $19.99 as seen on TV product must be produced for less than $1. There are some exceptions where the cost can go to $5, but then it becomes $29.95. Your cut is usually $.10 per item sold. You'll have the pleasure of knowing your product is being used exclusively to steal people's money and ripp them off with a shoddy product.

You can bust your ass and try to sell local, and probably spend $100 travelling around to write $100 in orders.

Is it no wonder that the new boom in business is fraud?

Look at Kickstarter. Never before have I seen small individual fraud on such a massive scale. Less than 50% of the projects are ever fully funded, less than 50% of the funded projects are ever made. People think they are placing an order for a finished product, but 99% of the time it is a rendering of a product that will never be made. Whatever you pledge, you don't get back.

It is the old fraud of taking $1 from 1000 people because each person losing $1 is not that big of a deal, whereas if you take $1000 from 1 person, that guy is coming after you.

The goal was never to help people, the goal is to hype something
that can be IPO'd making the fraudsters millions.

Mon, 07/16/2012 - 10:50 | 2620179 sumo
sumo's picture

"The goal was never to help people, the goal is to hype something that can be IPO'd making the fraudsters millions."

I got yer Hope and Change right here!

Mon, 07/16/2012 - 09:33 | 2619926 adr
adr's picture

July is going to be worse. People were actually shopping in June.

I talked to a few people in Target looking at school supplies. They were writing down what they have. The women all said they are going to wait until school starts to buy the supplies because they know Target will put everything 50% off and then drop stuff to 75% a week later.

Nothing moved in summer seasonal until it was at least 50% off.

Reality is asserting itself. People don't have enough money to pay for the inflated prices of everything. Historical 20% profit margins will be coming back to retail. The consumer will no longer pay $20 for an item that was bought by the retailer for $7.

The problem is the immense overhead of big retail will destroy it with margins like that. Deflation is the only outcome when the population can't afford anything. At least when the free market allows it. Supply and demand says if nobody buys at price X, you must lower it until somebody does.

Mon, 07/16/2012 - 10:12 | 2620056 Abiotic Oil
Abiotic Oil's picture

Was in a local store this weekend.  Huge summer clothing clearance sale. Talked to an employee who has been at the same store for 20 years and he said he has never seen so much summer clothing inventory left over or marked down as much as it was.  It was finally moving at well over 50% off retail.

Mon, 07/16/2012 - 10:30 | 2620120 Arnold Ziffel
Arnold Ziffel's picture

July sales are dismal. Every store is nearly empty even with 60% discounts AND cash back rewards. I have never seen it so bad.

Mon, 07/16/2012 - 10:49 | 2620178 SoCalBusted
SoCalBusted's picture

Same here.  Been seening tons of sales with big percentage mark downs.  At first I thought some of the stores were having a going out of business sale.  Perhaps they just don't know it yet.

Mon, 07/16/2012 - 09:41 | 2619945 dannynewmexico
dannynewmexico's picture

like the poster said above, all my cc purchases have been for beans, bullets and bandaids.



spent nearly 40 years in the jewelry trades,  the mom and pop jewelers are all but gone!!

Mon, 07/16/2012 - 10:25 | 2620097 Arnold Ziffel
Arnold Ziffel's picture
Business News



China's retail sales up 13.7% in June
Posted: 13 July 2012 1035 hrs

Mon, 07/16/2012 - 10:28 | 2620111 Shizzmoney
Shizzmoney's picture

Bernanke, Obama, Krugman, and even Romney:

"ZOMG! OUR recovery! It's melting! It's melting!!!!!11111"


Mon, 07/16/2012 - 10:34 | 2620132 Freewheelin Franklin
Freewheelin Franklin's picture

You made that word up, didn't you?
Mon, 07/16/2012 - 10:35 | 2620133 TrainWreck1
TrainWreck1's picture

Watch for a couple of name retailers to go under after Black Friday - if they even make it to November.


Mon, 07/16/2012 - 10:45 | 2620167 Shizzmoney
Shizzmoney's picture

Uh oh, Larry Summers just made a prediction:

"Even if the process proves protracted, the U.S. economy will eventually recover."

Whatever Larry says, the opposite usually happens.  Weare so fucked lol.

Unless by "eventually", he means in 2033, when the aliens arrive.

Mon, 07/16/2012 - 10:52 | 2620190 sumo
sumo's picture

" Even if I wipe out Harvard's Endowment fund, it will eventually recover (I'm so smart, even my blunders are magnificent) (smile)."

Mon, 07/16/2012 - 11:13 | 2620259 vachon
vachon's picture

"Expect furious Q2 GDP revisions imminently once the sellside community plugs this number into bean counter abaci."

Whoever wrote this is reaching literary Taibbi-ness.  Very cool sentence.  I lol-ed.

Mon, 07/16/2012 - 11:14 | 2620264 Boilermaker
Boilermaker's picture

REITs pushing through new 52 week highs.

Man, you gotta give credit to the sheer audacity.

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