In addition to this morning’s “noisy” and suddenly more tame CPI report, there is a broad-based decline in commodity prices that is more than a little bit outside of “usual” volatility. It should be noted at the start that commodity prices are not always direct reflections of economic activity or expectations for future activity, as other factors intertwine and take [...]
One more point on retail sales and consumer spending, as though the figures presented earlier are, I think, all pretty demonstrative of what is taking place in the economy, they can still be enhanced by taking account of additional factors. None of the data from retail sales or Gallup’s measures of economic advance are “deflated” or adjusted for changes in [...]
The disappointment from retail sales has been foretold by numerous other indications for months now. The idea that the economy would suddenly shoot higher after the “aberration” of the wintry first quarter was predicated almost exclusively on the mainstream interpretation of payrolls. For all that hope and optimism, it has never gone further than the BLS’ Current Employment Survey as [...]
Wholesales sales and inventories are still relatively better in June than earlier in the year, though the level of inventory looks nothing like what is being counted for GDP. Overall, the pace of sales continues to be relatively stuck in a low-growth track that shows little signs of being elevated. For an economy being determined marginally by inventory, supply chain [...]
I normally do everything I can to avoid sentiment surveys, like the Chicago PMI (the Chicago Business Barometer to be specific), because they really are misleading without exact context. However, any large move like the one in July should bring at least some interest since outlier events are often the most informative. What may be important is not necessarily the [...]
With today’s retail sales report, there is broad confirmation of the diminishing “resilience” of consumer abilities that have been dampening expectations ever since the turn in season failed to produce a massive surge. That is not to say that the past four months have not been better than those just prior, as growth has indeed cleared that low hurdle. It [...]
You hear it repeated incessantly that the US economy is consumer-driven, and perhaps it is in some very narrow aspects. The idea, however, that consumption accounts for 70% of the economy is false, a figure derived from GDP calculations that include, among other artificial creations, an imputation for homeowner rent equivalence (BEA estimates how much a homeowner might pay themselves [...]
Anyone waiting on the warmer weather to bring out shoppers proving the existence of the mythical resilient consumer is going to be very disappointed with retail sales in May. The rebound from January and February isn’t much of anything other than a resumption of the prior trend – and that is a problem itself. In other words, if there was [...]
We keep hearing about pent up demand as if it is a foregone conclusion. For some, particularly orthodox economists, it really is – it has to be. If there is no pent up demand awaiting some ephemeral trigger, then their whole theory of the economy is wrong, from the ground up. The Fed reduced interest rates throughout the economy (though [...]
Now that we have results for both Wal-Mart and Target, the retail, and thus consumer, picture has been largely filled out. Both companies continue to blame other factors (both cold; Target credit card theft) while dancing around with soft presentations of minor allusions to struggling consumers. At what point do “struggling consumers” begin to register as something more than a [...]
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