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Retails Sales Beat Expectations On Levered Car And Gas Sales, As Inflation Picks Up Again In Import Prices

Tyler Durden's picture


There is good and bad news in today's economic data release: on one hand retail sales in September beat expectations at 1.1%, on expectations of 0.7%, and up from an upward revised 0.3% in August. Retail sales less autos was a modest beat at 0.6% on expectations of 0.3%, although the previous number was revised substantially higher from 0.1% to 0.5%. Yet confirming that the bulk of the "beat" was in auto and associated gas sales, was that Retail Sales ex Autos and Gas (duh) came at 0.5% on expectations of 0.4%. Basically, surging subprime loans to autopurchasers and the resulting increase in gasoline sales was the reason for this "surprise" beat. And as for the bad news, import prices jumped to 0.3% in September, on expectations of -0.4%, a surge from August's revised -0.2%. And while fuel imports had dropped in August -1.4%, in September these jumped to a positive 0.1%, showing just how big the monthly sensitivity to any moves in the energy complex are. In other words, should inflation persist, don't expect for retail sales, which we expect to decline to recent deleveraging at the consumer level, to persist.

For those surprised by how resilient car sales have been here is Goldman Sachs with an explanation:

  • Vehicles sales have increased at a healthy pace over the last two years despite a weak household sector and a tepid recovery overall. What explains the steady growth in vehicle sales since the recession ended?
  • Based on the composition of sales, the main factor appears to be business investment spending. Vehicle sales are often thought of as an indicator of consumer demand, but companies account for about half of the dollar value of new purchases. Since vehicle sales bottomed, firms have accounted for about 70% of the growth in purchases. The outlook for business vehicle purchases arguably remains bright, mostly due to pent-up demand.
  • Over the short term, consumer purchases of vehicles may also remain strong as recent supply-chain disruptions are fully resolved. However, the medium-term outlook appears less favorable than for business sales. Most importantly, unlike in the business segment of the market, there is no obvious pent-up demand for consumer sales—our modeling suggests consumer vehicle holdings are close to equilibrium. Secular trends (population growth, depreciation, etc.) should support consumer sales over time, but cyclical factors (unemployment, credit conditions, and oil prices) may be a persistent headwind.

After falling off during the spring and summer, vehicle sales have picked up recently. Total light weight vehicle sales rose to a seasonally adjusted annualized rate (saar) of 13.1 million units in September, up from 12.1m in August. Part of the improvement reflects a greater availability of Japanese-brand vehicles following supply-chain disruptions earlier this year. However, vehicle sales have also increased at a healthy pace over the last two years—at an annualized rate of 18%—despite a weak household sector and a tepid recovery overall. Given the depth of the recession in the vehicle sector, some bounce back should have been expected. But what fundamentally explains the strong recovery in vehicle purchases?

Based on the composition of sales, the main factor appears to be business investment spending. Vehicle sales are often thought of as an indicator of consumer demand, but companies account for a large share of new purchases—as of Q2, business purchases accounted for 49% of the dollar value of new sales, according to the Department of Commerce (DOC). Each month the DOC calculates the share of unit sales to consumers and to businesses, using state-level data on vehicle registrations. As shown in the exhibit below, since vehicle sales bottomed in February 2009, sales to firms have accounted for about 70% of the growth in new purchases (the breakdown of sales is not yet available for September, so for last month we have assumed the shares were unchanged from August; also note that sales to businesses are broader than “fleet sales”, and include purchases by small business at retail vehicle dealers).
Most of Sales Growth Coming from Business Sales

The outlook for business vehicle purchases arguably remains bright, mostly due to pent-up demand in this segment of the market. Real investment in transportation equipment fell by 68% peak-to-trough during the recession, a far larger drop than for other types of business investment. And despite a strong recovery to date, year-over-year growth in the stock of transportation equipment is still negative, meaning that investment spending over the last year has run below the rate of depreciation (Exhibit 2). Modeling business demand for transportation equipment is challenging (as with most types of nonresidential investment), but a simple model relating the stock of business transportation equipment to real GDP and relative prices suggests transportation capex is probably well below “equilibrium”. Short-term indicators are mixed, with strong heavy truck sales and durable goods orders, but weakness in the timelier business surveys. If the economy enters another recession, business vehicle sales would likely decline too. However, barring that, they should be poised for continued strong growth.
Low Capital Stock Growth Suggests Pent-up Demand

Over the short term, consumer purchases of vehicles may also remain strong as supply-chain-related issues are fully resolved. However, the medium-term outlook appears less favorable than for business sales. We model the stock of vehicles owned by households with four main factors (model details appear at the end of this note):

1. Demographics. Population growth is the single most important determinant of vehicle stocks—more people equals more cars on the road. Gradual growth in the population should continue to support vehicle sales in the future. The age structure of the population also matters: states restrict driving among the young, and driving miles and vehicle ownership eventually fall off for older age groups (according to data from the Federal Highway Administration and the Federal Reserve’s Survey of Consumer Finances, respectively). The age structure of the population is currently a neutral factor for the vehicle sales outlook, but will likely become a negative in 5-10 years as the baby boomers age.

2. Income levels. Income levels also help determine vehicle ownership. For example, in a large sample of countries, GDP per capita explains about 80% of the variation in the number of vehicles per person (World Bank data for 2008). Rising income levels have also supported greater household ownership of vehicles in the US over time, and today 87% of US households own a car or truck (not including leased or employer-provided vehicles).

3. Cost of vehicles and financing. Not surprisingly, car and truck sales are also sensitive to the cost of vehicles. In our modeling, we incorporate four specific variables: 1) the relative price of motor vehicles; 2) the relative price of gasoline; 3) real interest rates; and 4) credit conditions. Lower costs help explain the strong growth in consumer auto purchases in recent years: until recently, new car and truck prices had fallen steadily relative to overall consumer prices, and real interest rates have generally declined as well.

4. Labor market conditions. Lastly, labor market conditions—and particularly the unemployment rate—appear to matter for vehicle sales. These variables may proxy for income expectations, or perhaps for consumer confidence in general.
Given these fundamentals, we see a relatively weak outlook for vehicle sales to consumers over the next 1-2 years. Most importantly, unlike in the business segment of the market, there is no obvious pent-up demand for consumer sales: our model suggests that the stock of consumer vehicles is close to equilibrium at present. Therefore, growth in consumer vehicle sales will require improvement in the underlying fundamentals. Some factors will remain supportive of consumer auto sales, such as population growth, depreciation, gradual per capita GDP growth, and perhaps lower relative prices for cars and trucks. However, cyclical factors—especially unemployment, but also possibly credit conditions and oil prices—may be a persistent headwind.

Our equity research analysts forecast total vehicle sales of about 14.0m by the end of 2012. Based on our broader macroeconomic forecasts, this estimate looks achievable. But we suspect that most of this growth will come from sales to businesses, with the consumer segment of the market growing at a much slower pace.


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Fri, 10/14/2011 - 08:53 | 1772959 SheepDog-One
SheepDog-One's picture

Cool lets ramp stocks then! Actually seems they had it pre-priced-in already...nah surely that couldnt be. Any bets on the nuclear war kickoff in Iran this weekend, or maybe it will be next. 

Fri, 10/14/2011 - 08:56 | 1772975 sabra1
sabra1's picture

just think of all those blown up cars that will have to be replaced! i bet GM already has their showroom busting at the seams in iran! 

Fri, 10/14/2011 - 10:03 | 1773286 Pool Shark
Pool Shark's picture



Actually, retail sales were down across the board in September:

The increase was due solely to seasonal adjustments...

Fri, 10/14/2011 - 15:09 | 1774837 hannah
hannah's picture

+100 pool shark.....but does it matter...? as no one actually reads the report! CNBC has repeatedly stated up 1.1% all f'ing day!

Fri, 10/14/2011 - 09:22 | 1773103 Jeff Lebowski
Jeff Lebowski's picture

If it does happen, accolades to ORI.

Since Chris needs to Pussyfoot, let me say it.

Very high liklihood of a huge downturn in the market next week. Black Monday, Tuesday or some such. The news will flash on Saturday, 15th. Good to pay attention.

Everything down, a risk off like not seen in a long time. PM's too. It's been hinted at variously, astrologically included. Clif High also has that date (10/15) as a big move day.

Hedge accordingly. I am.


Fri, 10/14/2011 - 11:19 | 1773745 deez nutz
deez nutz's picture

Dead grandmas make great GM customers!! (even if their signature is only an X).

Get real folks, GM is a sham and is back to the fog-a-mirror-get-a-car program.  When this fkker tanks again, and it will, GM will back for another 50 billion. 

Fri, 10/14/2011 - 08:54 | 1772971 SheepDog-One
SheepDog-One's picture

'Business vehicle purchases remains bright'...gee so who is buying those, the USPS? Gooberment?

Fri, 10/14/2011 - 09:31 | 1773144 Scarlo
Scarlo's picture

I've been noting a bit of channel stuffing in my area for the last month or so now. (parking lots with new cars, NOT the dealerships)

Fri, 10/14/2011 - 08:54 | 1772972 oh_bama
oh_bama's picture



Fri, 10/14/2011 - 08:56 | 1772978 broke433
broke433's picture

I bought put options on VIX

Fri, 10/14/2011 - 08:57 | 1772979 sabra1
sabra1's picture

i bought some onion dip to watch the show about to unfold!

Fri, 10/14/2011 - 09:01 | 1772999 junkyardjack
junkyardjack's picture

I killed my shorts after day two and went long, markets can stay irrational longer than you can stay solvent.  Ride the HFTs

Fri, 10/14/2011 - 09:03 | 1773006 SheepDog-One
SheepDog-One's picture

I did buy the dip, 20% off sale on ammo last week, went all-in long.

Fri, 10/14/2011 - 08:55 | 1772973 broke433
broke433's picture

QQQ is going to hit 52-week high soon, rally on Bitchez

Fri, 10/14/2011 - 08:58 | 1772977 Archimedes
Archimedes's picture

Hey Tyler,

I have been following the GM channel stuffing story and last month you did not post an article about it as GM sold a butt load of vehicles and the dealer inventory dropped.

You are constantly saying GMAC is giving out sub prime auto loans to anyone with a pulse and I believe you. But since you seem to have a keen ability to sift through the numbers and find the important data is would be great if you could do a story on what percentage of GM car buyers have good credit/ fair credit/ poor credit. It would be interesting to see exactly how many car loans are sub prime. It would bolster your case and I won't have to see all of the trolls back on the site saying how the US consumer is so resilient.


Fri, 10/14/2011 - 09:00 | 1772995 SheepDog-One
SheepDog-One's picture

I dont believe anything Gubment Motors says.

Fri, 10/14/2011 - 09:04 | 1773008 Archimedes
Archimedes's picture


Business sales increased other than Car rental fleet sales? So is this small businesses buying new pick up trucks (Which accounts for the spike in new truck sales). I dont see how City and State Governments can afford new auto sales when their budgets are shrinking.

Fri, 10/14/2011 - 09:06 | 1773015 SheepDog-One
SheepDog-One's picture

I dont know, do you know of any small business that is buying new trucks like mad? I dont know of any myself.

Fri, 10/14/2011 - 09:33 | 1773157 Isotope
Isotope's picture

September 2011 sales:

Total cars - 487,239

Total trucks - 566,483 (these are apparently light trucks)

On the bright side, Maybach sold 4 units.

Fri, 10/14/2011 - 09:04 | 1773009 No Mas
No Mas's picture

Trolls?  How about voices of reason.

The Tyler Durdens tell us all of the time that GM sales aren't, it's just "channel stuffing."  Now when the retail side of the house explodes, well, it must be those subprime loans!!

The cars are either sitting on the lots or they aren't and quite frankly, the evidence indicates they aren't.

Come on ZH'ers.  Face reality.  There is no crash to be had any time soon.  Things are exactly as the MSM media has been telling you for three years.  Not great, but growing.  Not fast, not steady but still growing.  The recession was deep and it will take time to come out of it but come out of it we will and we are now in the process.

GM might fail as they are a harbor of idiots and guberment money.  But they are not going to fail because of weak consumers.  While it appears most of the ZH Sheeple are unemployed, about 90% of the rest of the country is working and spending money.

Smile, this is actually good news for all of us.  Think about it sheeple; one day you too may have gainful employment!

Fri, 10/14/2011 - 09:10 | 1773037 Tsar Pointless
Tsar Pointless's picture

Let me ask you a question:

Without the free and easy credit that once again is flowing like the Nile, Mississippi and Amazon all rolled up into one, do you think people could/would be buying new cars today?

When this debt dance party ends - AND IT WILL - the hangover is going to be mighty torturous and lengthy.

This isn't 2008. There isn't a year in the history of our country - or world, for that matter - to which I can compare our current situation.

Yeah, I'm saying it's different this time.

Fri, 10/14/2011 - 09:13 | 1773052 firstdivision
firstdivision's picture

That is idiotic to think that we are not on the verge of another economic collapse.  If we have been doing nothing but growing for the past 3 years, why are stocks down from their peak?  Also, just to point out another flaw, exactly 3 years ago we were spiraling down the toilet.

Fri, 10/14/2011 - 09:19 | 1773072 Archimedes
Archimedes's picture

Funny I mention Trolls and you show up!  How appropriate. I usually don't waste my time commenting or explaining things to morons and I won't list the countless issues America faces. But the fact that you can say 90% of the rest of Americans are working shows what an imbecile you are.

Please show a stat proving this or go away, because if you comment on another one of my posts  with nonsense I am going to have to embarrass you.

Fri, 10/14/2011 - 09:18 | 1773079 SheepDog-One
SheepDog-One's picture

NoMas...who are you arguing with? Tilting at windmills, LUNATIC? No ones stopping YOU from buying as many new cars and GM stocks as you want! Go all-in, BITCH!

Fri, 10/14/2011 - 09:30 | 1773138 jdelano
jdelano's picture

'there is no crash to be had any time soon'

You're on the record with that one now.  I'll put this on the record and let's see how things shake out:

'you will see 950 on the s&p before the first of the year.  If you don't, then you will see 700 or lower on the S&P in Q3 of 2012.  Within one year from today, you will see riots on the streets of America, London, and all of Europe.  You will waves of municpal defaults, pension cuts, and unemployment at >12%.'  

This is very simple math.  Insolvent is insolvent, unsustainable means unsustainable.  There are only two options--the system must either collapse or be massively reformed.  You are not doing anyone a favor by preaching 'all is well'.  Ignoring a terminal cancer and telling yourself 'it's not so bad, I've got at least a few months and in that time a miracle could happen' is called the denial phase.  It's a natural process, so I understand why so many of you need to go through it, but at some point you need to put aside the scared child part of you and embrace the adult.   An adult stands up and faces the void.  An adult addresses the reality and puts his or her affairs in order so that the impact upon relatives, friends, and loved ones will be tempered somewhat.  This country needs to get through the denial phase and start preparing.  

Fri, 10/14/2011 - 09:50 | 1773232 sopel39
sopel39's picture

I think No Mas has the point. I have been reading this blog for a while since it is a good source of information and exposes frauds of our Lords. However, it seems that everybody here is too pessimistic. The World is not ending, it is just changing.

Fri, 10/14/2011 - 10:43 | 1773541 MK ultra
MK ultra's picture

+1 Mas.

The collapse of the tech buble in '99 couldn't do it.

The RE collapse in '08 couldn't do it.

GM going bankrupt was a bump in the road.

Collapsters pointing at the weak Baltic Index were wrong.

The Bird Flu "Pandemic" was a hoax. (Not the bird flu part.. just the "pandemic")

The market collapse to 6500 was a BTFD opportunity to get rich. Move along.. nothing to see.

Iranian Nuke Program? Yeah, right. Stuxnet bitches.

Arab Sping my ass. Israel just laughs at their unorganized black asses running around in Toyota P'ups with AK's.

Alt-A Loan refin ?? Someone give me an update, hahahaaa.....

Don't forget the Tsunami, and Dexia and Greece and 16% unemployment, and, and.....

Not gonna happen folks. Quit living in fear/paranoia, your 36" flat screen and $5K zero-turn lawnmower are waiting for you on isles 3 and 5.



Fri, 10/14/2011 - 15:10 | 1774813 hannah
hannah's picture

GM didnt sell a butload of anything....

Fri, 10/14/2011 - 08:58 | 1772989 Belarus
Belarus's picture

Looks like resistence of 1220 will be taken out soon. Then every major market indice will head green on the year. Then confidence will come back just in time for late fall rally. Sending every major index north of 15+% on the year while the ECRI indicators all turn up. 




Fri, 10/14/2011 - 09:01 | 1773000 SheepDog-One
SheepDog-One's picture

Too bad all that will be irrelevant with the nuclear world war kickoff in Iran.

Fri, 10/14/2011 - 09:08 | 1773030 No Mas
No Mas's picture

You can't face reality can you Sheeple-Dog?  The world has been ending for you pretty much every day since you began posting, yet here we are, slugging along, making a go of things and you just can't seem to face the reality of it all.

Tell you what, if there is no nuclear war anywhere in the world in the next year, why don't you agree to start posting comments about how things aren't great but they're improving.  And never mention war or hyperinflation again.

Any chance you can ever admit you're simply wrong about the direction of our economy, our nation and the world?

Fri, 10/14/2011 - 09:22 | 1773051 SheepDog-One
SheepDog-One's picture

LOL hillarious! Hey go buy stocks then idiot! No ones stopping you go all-in ass hat!

I'm happy that I was able to spin your troll ass up into a frenzy this morning though! Put your money where your mouth is and BUY IT, bitch!

Fri, 10/14/2011 - 09:52 | 1773240 jdelano
jdelano's picture

MY god--can you really, honestly be so blind?  When there are people amassing in the streets in New York, London, Chi town...when sovereigns are being downgraded one after another, when American municipalities are GOING INTO BANKRUPTCY, when stock market volatility is like a tennis ball shot from a cannon into a room full of moustraps, when unemployment is 9% and rising in the us and hitting all time records in the U.K, when corporate earnings are at all time peaks and have nowhere to go but down as virtually EVERY OTHER market in the world has fallen firmly into bear territory, when China is crashing and we are entering a trade war and GDP growth is so feeble that....oh screw it.  Screw it and screw all of you--you don't want reason, you don't want a future, you want the ponzi to go on and the HGTV fairy tale to resume.  SHEEP DOG CAN'T FACE REALITY?   SERiOUSLY?  here you are injecting a ten gallon load of MSM morphine into your eyeballs to slip into a palliative cocoon of lalalalalalala---and SHEEP DOG is the one living in delusion?  Do you think I really want things to be bad?  Do you think I wouldn't love to just put my money in the market and head to the beach knowing that everything was going to be fine?   I want to help you goddamn people-but you know what, you just keep running back to mommy's skirt.  Screw it.  You're not worth fucking helping.  Gold helps those who help themselves.  To gold. 

Fri, 10/14/2011 - 09:30 | 1773143 jdelano
jdelano's picture

you do a lot of flip flopping roose

Fri, 10/14/2011 - 09:38 | 1773170 Belarus
Belarus's picture flip flopping: this market is fucked within 3 weeks to a year. I just find it amusing how the market will just toally ignore the elephant in the room while everyone goes out there looking to pick up nickels in front of a steam roller. 

Car sales will be toast when the 10 year hits 10%. The economy will fall off a cliff. And this time there are no "sticksaves" when interest rates get out of control. We're coming right up to the cross-road: a deflationary depression or hyper-inflation. We'll know soon which one but I sure can take a guess.

Never miscontrue my mocking of the market. I'm the biggest bear alive.

Fri, 10/14/2011 - 09:41 | 1773182 Belarus
Belarus's picture

...but it doesn't mean I can't see how retarded the market is with short-term rose-colored glasses. look, 1220 is being taken out, more shorts will cover, market goes higher, ramp comes in later today, takes it even higher. By Monday every fool alive will be afraid to miss the next great bull market. LMAO.

Fri, 10/14/2011 - 09:54 | 1773253 jdelano
jdelano's picture

fair enough

Fri, 10/14/2011 - 12:06 | 1774036 firstdivision
firstdivision's picture

WOW!  Look at how we sliced through resistence and kept going....oh wait we didn't.  GFY.

Fri, 10/14/2011 - 08:59 | 1772994 EZT
EZT's picture

GAP closing 100 stores in the USA...

Fri, 10/14/2011 - 09:03 | 1773007 junkyardjack
junkyardjack's picture

Who put the turd in the punchbowl? No one cares about your reality negative energy, we only want to see some positivity.  Think what that will do to GAPs operating margins? I might pick up some of their stock on the cheap today.  Isn't it funny that all the US companies are now shutting down their stores and relocating into China to save themselves.  God if China does blow up its going to be epic

Fri, 10/14/2011 - 09:01 | 1773001 firstdivision
firstdivision's picture

I'm due for a vehicle, and I've noticed that used vehicles have risen in price quite substantially.  In fact, used vehicles have become so expensive, that I'm actually going to end up buying new (reluctantly).   Any ideas on why used car prices have skyrocketed in the past year?

Fri, 10/14/2011 - 09:10 | 1773036 sabra1
sabra1's picture

if you need a new vehicle, cal,l Rick Shaw!

Fri, 10/14/2011 - 09:16 | 1773067 OneEyedJack
OneEyedJack's picture

cash for clunkers

reduced inventory of used cars

Fri, 10/14/2011 - 09:42 | 1773188 firstdivision
firstdivision's picture

But didn't cash for clunkers only qualify for new cars by GM/Ford/Dodge?  Wouldn't used car inventory have risen due to cash for clunkers?  It would make sense if used car prices fell, but they have risen quite a bit lately.

Sat, 10/15/2011 - 00:41 | 1776349 Jeff Lebowski
Jeff Lebowski's picture

I share your confusion.  I looked at a relatively basic 4 wheel drive, 4 door cab, 2010 Toyota Tundra with 20k miles at a Carmax (no negotiation) for $31,500.  I bought almost the same truck (except new and with TRD package that the used truck didn't have) for $33,000.  I had zero intention of buying new, and yet, i did.

I asked the dealer why the high price on used, when new is practically the same price - he said used cars were greater in demand.  I asked him how he sells them when they are so close in price.  He admitted that he hadn't seen one sold in 3 weeks.


Fri, 10/14/2011 - 10:20 | 1773387 Bobbyrib
Bobbyrib's picture

During economic depressions demand for used vehicles rises and as OneEyedJack said Cash for Perfectly Good Cars (err Clunkers) eliminated some of the supply so prices rose.

Fri, 10/14/2011 - 09:05 | 1773012 DosZap
DosZap's picture

Going to be a ot of increase in the auto numbers soon.

Folks are going to have to buy new cars, as they have put off purchases for 3-4yrs longer than usual, and their old ones appproaching 200+k are falling apart.

Their is a point of diminishing return.0%-60mos, little down,(or nada) so you  can't pay, lose job, turn in, walk away......................the new book on purchases.



Fri, 10/14/2011 - 09:07 | 1773020 Racer
Racer's picture


all seasonal adjustment!


Fri, 10/14/2011 - 09:11 | 1773041 DavidC
DavidC's picture

Yes, the whole lot and as Karl says, a 5% month on month down, non-seasonally adjusted.

ALL of it is seasonal adjustment.


Fri, 10/14/2011 - 09:15 | 1773063 Racer
Racer's picture

and if you take inflation into account then the figures are even worse!

Fri, 10/14/2011 - 09:14 | 1773059 docj
docj's picture

The Bureau of Lies and Statistics strikes again.

Fri, 10/14/2011 - 09:39 | 1773174 Archimedes
Archimedes's picture

H/T to Karl on this one. DOing what Journalists are supposed to do. Actually take the time to dig through the data and give the real story. You won't see Steve Liesman doing that!

Fri, 10/14/2011 - 10:00 | 1773270 crammar
crammar's picture

Seems nobody noticed this.

Fri, 10/14/2011 - 09:08 | 1773026 Dick Darlington
Dick Darlington's picture

Retail sales figures are adjusted for seasonal variation, for holiday and trading day differences, but not for
price changes.

Somehow it's VERY hard to believe into the "strength" of american CONsumer considering everything... Call me a sceptic but i bet this is more inflation related than real spending increase.

Fri, 10/14/2011 - 09:08 | 1773027 sabra1
sabra1's picture

Karl Denninger:

Let's find our great increases! Ok, motor vehicle sales were up, right? Uh, no.

Electronics? Nope.

Nobody expects building materials to be up (and they weren't) but food and beverages must have been, since we had an actual increase, right? Nope.

Health? Nope.

Gasoline! I know, gasoline! Uh, no.

Clothing! Certainly kids needed new clothes going back to school! That's where the increase was. Oops.... that was down too.

Sporting goods? Collapsed - down some 18% m/o/m.

General merchandise! That's the ticket! Well, no - it was down about 7%.

I know I know I got it! The Internet saved us!

Actually, the Internet (non-store retailers) were down slightly too.

Oh, so we have one place left that must have been up - bars. After all, with the economy sucking this badly we all went out and get drunk (and put it on our credit cards), right?

Actually, we didn't - September saw a ~2.5% decline there too.

The truth? The entire gain was "seasonal adjustment." All of it. In other words, in actual dollars there was not only no increase there was a net decrease in sales of approximately five percent - not annualized either, month-over-month!

Put that in your economic pipe and smoke it.

Fri, 10/14/2011 - 09:11 | 1773039 SheepDog-One
SheepDog-One's picture

No WAY! They lied about retail sales numbers being up? Im writing a letter to a Gubment official, frankly I'm OUTRAGED!

Fri, 10/14/2011 - 09:08 | 1773031 SheepDog-One
SheepDog-One's picture

WELL looks like the recession is over! Ben can put away his money printing machine now then, and markets can stop running on promises of more because we're RECOVERED, Bitchez!

Fri, 10/14/2011 - 09:12 | 1773050 Fourth Horseman...
Fourth Horseman of the Apocalypse's picture

September had five Fridays which means for most Americans, there were three paychecks.  You can see the impact on Restaurants up 1.2% MoM but Grocers down 0.2%.  Consumers used the extra paycheck to spend on Furniture, up 1.1%, and Clothing, up 1.3%.  What was surprising was tha fact that Electronics was up only 0.2%.   Building Materials were down 0.1% after rising 1.2% in August and this was mostly due to the hurricanes.  Auto sales were also impacted by delayed purchases from August to September due to the hurricanes.  Given this, we should see a large contraction of around 0.8% in October retail sales.  

Fri, 10/14/2011 - 09:15 | 1773062 SheepDog-One
SheepDog-One's picture

Thats fucked! Well, go to barter transactions then.

Fri, 10/14/2011 - 09:14 | 1773057 Johnny Lawrence
Johnny Lawrence's picture

Still looks like the S&P is having hard time getting through the 1215-1220 range.

Fri, 10/14/2011 - 09:16 | 1773068 lizzy36
lizzy36's picture

Increase in gasoline sales?? Seriously?

What has increased is the PRICE of gas. This week on average +23.3% y/y. Obviously at times in the bast 6 months that weekly number has been closer to +40%.

Now when one looks at numbers coming from Mastercard, and DOT, actual gasoline demand is down about 2% y/y and near 10 year lows.

For instance, according to Mastercard, the current 4 week average gasoline demand is down 2.3% y/y. The 29th week in a row demand has fallen. Well gas prices on average are up 26% for the same period y/y.

US gasoline demand for the month of August was down 1.31% from July and down 2.0% y/y. Demand for gas in the Summer months was at a 15 year low.

So what the gasoline component in the retail sales number is capturing is the fact that the PRICE of gas is up 26%. So the absolute value of sales is higher, while the actual DEMAND for the product is at decade lows. Does that seem particularily bullish to anyone?


Fri, 10/14/2011 - 09:43 | 1773192 Bobbyrib
Bobbyrib's picture

It's obvious the speculators are driving up the price of gasoline. Just when crude oil seems to dip to $80 a barrel, it is run back up to the mid-80's to low 90's. Traders know we need gasoline and food to survive, so they will continually run up the prices of both products.

If OWS were smart enough, they would add that to the protest.

Tue, 07/03/2012 - 00:19 | 2582708 ndrewoods
ndrewoods's picture

I do agree. They maybe confuse that the PRICE of gas is the one increasing, not the sale of it. To be honest, since 2010, my gas tank never tasted a full tank. Oh well.

Fri, 10/14/2011 - 09:17 | 1773074 Clint Liquor
Clint Liquor's picture

Auto sales up, Platinum and Palladium down big. It makes as much sense as anything else, I suppose.

Fri, 10/14/2011 - 09:17 | 1773075 broke433
broke433's picture

It's earnings season, the Teflon Dow is unstoppable until a week after Apple reports and the US super committee and the EU fuks up everything but that doesn't happen until a couple weeks after so rally on Bitchez

Fri, 10/14/2011 - 09:17 | 1773076 PaperBear
PaperBear's picture

"import prices jumped to 0.3% in September, on expectations of -0.4%, a surge from August's revised -0.2%"

It was expected to be moving down ? Give me a f**king break. American dollars formerly foreign owned are returning to the USA.

And the only direction for import prices is up from now on.

Fri, 10/14/2011 - 09:19 | 1773084 alien-IQ
alien-IQ's picture

looks like they're gonna shove the /ES up to 1250 no matter what.

we should be getting a fairly jaw dropping amount of rumors today once the European market closes.

smells like another triple digit DOW pump job in the making today.

Fri, 10/14/2011 - 09:26 | 1773120 Johnny Lawrence
Johnny Lawrence's picture

S&P has made three attempts to close above the 1215-1220 range and been shut down three times.

Fri, 10/14/2011 - 09:40 | 1773178 cosmictrainwreck
cosmictrainwreck's picture

not to mention dude that bought 497,764 VXX at 9:26am....bought every odd lot in sight at 4% premium (5.7% premium to right this second). Guess he's not worried about little $million swings - transitory

Fri, 10/14/2011 - 09:44 | 1773197 alien-IQ
alien-IQ's picture

I'm aware of that. I'm just judging by the shanking the DXY is taking. Looks like they're putting forth a big effort to make sure that 1220 resistance gets broken today. Remember, next week is options expiry. And the market seems to only travel in one direction on those weeks.

In the's all bullshit anyways. This market is running on nothing but rumors of unicorns coming to save Europe from the inevitable default of multiple nations....As if...

Fri, 10/14/2011 - 09:54 | 1773249 cosmictrainwreck
cosmictrainwreck's picture

OK....we have the 1220. odds it holds to close? (not sarc)

Fri, 10/14/2011 - 09:22 | 1773099 broke433
broke433's picture

The Tylers are greatttttt!!! They top call gold, silver and the VIX exactly a couple days before they collapse.

Fri, 10/14/2011 - 09:28 | 1773114 Johnny Lawrence
Johnny Lawrence's picture

OT: Thought this was pretty cool.  From Art Cashin this morning...


On Tuesday morning, I was headed from the NYSE to my office at 40 Wall to clean up some paperwork. As I stepped on to Wall Street, I joined the file headed east (with the barricades up during the demonstrations, sidewalks are so narrow that they accommodate one single lane file going one way and another going in the opposite direction).

Only after I had stepped into the eastbound file did I notice that the three folks in front of me were carrying placards (as were the four behind me). Immediately, I was teased and taunted by the small crowd of Exchange types who were outside smoking or catching a couple of rays of late morning sunshine. “Hey Art! Throwing in with the demonstrators?” or “where’s your beard and sleeping bag”? or some other taunt.

The sign carriers seemed to get a little nervous. Why had the crowd suddenly turned animated? What prompted the noise? As we neared the corner, there was just enough room for the first sign carrying demonstrator to turn around.

“Hey!” he shouted, “You’re Art Cashin. You’re the only guy on TV that I listen to.” He quickly shook my hand. I turned off onto the next street as the “demonstrators” turned the corner. As I walked the remaining two blocks, I passed several tourists who apparently recognized me. They pointed and said exactly what the demonstrator had said. “You’re Cashin. You’re the only guy on TV that I listen to.” As I rode in the elevator to the office, I puzzled about the anti-Wall Street demonstrators who apparently spent much of their day watching CNBC. I also wondered what in my presentation seemed to appeal to those who hate Wall Street as well as regular investors. “Tis a strange world, indeed.

Fri, 10/14/2011 - 09:37 | 1773169 Bobbyrib
Bobbyrib's picture

Seems like most of the demonstrators are complete idiots.

Fri, 10/14/2011 - 09:40 | 1773176 Johnny Lawrence
Johnny Lawrence's picture

Disagree.  This shows that they just want honesty, and Cashin is.  He's not a typical Wall Street cheerleader.

Fri, 10/14/2011 - 10:01 | 1773277 Bobbyrib
Bobbyrib's picture

Just because he didn't suggest Wall St is blameless, it doesn't mean he is a saint. The guy still represents Wall St.


To me it seems that the quote you posted, made it seem he was thinking: 'man, these idiots have no clue who I am.' Considering they are protesting Wall St and the Director of Floor Operations for UBS walks by and they tell him what huge fans they are. Seemed to me he was basically calling them idiots.


Fri, 10/14/2011 - 09:45 | 1773202 spanish inquisition
spanish inquisition's picture

Said something like this a year ago -

I like Art, he kicks it old school and is still anchored in reality.

Fri, 10/14/2011 - 09:40 | 1773180 Carl LaFong
Carl LaFong's picture

Market Ticker points out this is ALL "seasonal adjustments". Of course the MSM is behind the curve (on purpose) as usual.

Fri, 10/14/2011 - 09:53 | 1773246 mayhem_korner
mayhem_korner's picture



Couple soberizers (new word) on the data here:

1) The obvious discounting of the retail sales by inflation (i.e., "real" sales volume v. "nominal")

2) Don't forget the piece (Bruce K I think) about the extended September calendar (5 reporting periods for many metrics as opposed to 4). 

As they say in fitness training, the mirror is a better indicator than the scale.  Looking out the window and seeing the day-to-day (mirror) tells me the US economy is decimated; any blip on the scale is just transitory.

My two cents...

Fri, 10/14/2011 - 10:00 | 1773272 johngoes
johngoes's picture

If businesses are sittin' on a wad of cash (source - MSM) why not pump up the stats by buying a shiny Chevy. You could get 4 or 5 low end models for what it costs for an employee (including salary, benefits, and taxes.) What's worse - auto monthly maintenance, or vacuous vacation demanding deadbeat employees?

Who needs productivity? If consumers can't step up, why we businesses will take their place!

Fri, 10/14/2011 - 10:10 | 1773311 steve from virginia
steve from virginia's picture


Oh boy! Car dealers and manufacturers are selling lots of cars!

Good news for them but the cars are dead weights on those who buy them because they cannot pay their own way. Not only are there (massive) per car subsidies -- think 'highways' -- but owners have to something 'productive' besides driving the cars in order to pay for them. This productive period is a large part of every worker's year.

The waste-based economy digs a deeper hole for itself for a few months of phantom gain. Keep in mind this gain is driven by another impulse of debt, the demand bids up the price of fuel beyond which those new-car buyers are unable to support.

Nobody learns and mistakes multiply.

Fri, 10/14/2011 - 12:11 | 1774060 gnomon
gnomon's picture

Keep it simple.  The cheerleaders on this thread for the "onward and upward" theme have to obstinately ignore the 1.5 to 2 trillion of added government debt per year (for years to come) to keep the boogeyman away from their feeble/febrile minds.  What can not be sustained will not be sustained, (with all of the attendant consequences).

The cheerleaders are fools or trolls, take your pick.

Fri, 10/14/2011 - 12:31 | 1774153 Snakeeyes
Snakeeyes's picture

Retails sales were actually DOWN 5%, not up 1.1%. That was purely a seasonal adjustment effect.

Economy still blows!

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