Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Economists ‘Puzzled’ by December Retail Sales Decline

Economics / Recession 2008 - 2010 Jan 15, 2010 - 11:03 AM GMT

By: Mac_Slavo

Economics

Best Financial Markets Analysis ArticleWhile most Americans understand that falling wages, job losses and contracting consumer credit leads to less spending, it seems that many economists just can’t figure out what happened to retail sales in December.


Some earlier reports and estimates this month sugested that December retail sales might have made a recovery over November, and, admittedly, we were surprised and in somewhat of a state of disbelief. However, on the same day we pointed out that December tax sales receipt were down, indicating that sales overall would be down.

Today we get the “official” numbers from the Commerce Department and they confirm the position we have held since the summer of 2009, that retail sales would be lackluster and below expectations.

“The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast.

For the year, sales fell 6.2 percent, the biggest decline on government records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent.”

We assume anybody with the ability to perform basic mathematics and deductive reasoning probably came to the same conclusion we did months before the holiday season got into full swing. Of course, there are always exceptions, and as usual, it was the economists who didn’t see the depression coming in the first place, that expected sales numbers to outperform. Once again, they were wrong:

“…many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don’t necessarily signal a big consumer pullback and could be a blip.“

We’ve said it before, and we’ll say it again: When an economist says something, especially if they are employed by the federal government, believe exactly the opposite.

In this case, that means that the December figures DO signal a big consumer pullback. This was the holiday shopping season, you know, the one they tout as the most important time of the year for retailers, where a majority of retailers earn 25% or more of their yearly sales and make or break their yearly numbers. This was the time of the year when consumers were supposed to be spending, because by all indications, the economy was recovering. If it is not a consumer pullback, what is it?

A blip?

Just like the blip we saw the previous month? Or how about the blip in unemployment month over month for all of 2008 and 2009? There’s also that foreclosure blip, you know, where around 2.8 million people lost or were threatened with losing their home in 2009.

Here are some more blips to look for in coming months:

  • Retailers will report lower retail sales numbers. In many cases this will lead to retail bankruptcies, probably for some major retailers as well as a host of smaller retail operations.
  • Bankrupt retailers will pull of out their commercial real estate locations in droves, setting of the commercial real estate collapse. In fact, the CRE bubble is and has been collapsing, but most mainstream news outlets and economists refuse to discuss it. (See Detroit and Scottsdale as just a couple examples)
  • The second wave of mortgage meltdowns will commence starting around April of this year and continue into 2011.
  • Credit card defaults will continue to mount as a broke consumer will need to begin choosing between paying essential bills like food, electric and gas instead of paying off debts incurred years ago during the credit bubble.
  • Employment, though it may see a slight recovery due to Census hiring (BLIP!), will continue its downward spiral in 2010

But, these are just minor blips on a radar screen. Pay them no mind, because we all know that when you have a bunch of blips going off on a radar screen, the best thing to do is to assume it means nothing.

By Mac Slavo

http://www.shtfplan.com/

Mac Slavo is a small business owner and independent investor focusing on global strategies to protect, preserve and increase wealth during times of economic distress and uncertainty. To read our commentary, news reports and strategies, please visit www.SHTFplan.com

© 2010 Copyright Mac Slavo - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in