THE BE YOUR OWN ECONOMIST ® BLOG
Today the Census Bureau issued a surprisingly strong retail-trade report (http://www.census.gov/marts/www/marts_current.html). May’s total was 1.0% ahead of April’s, and April’s figure was revised upward from an 0.2% drop to an 0.4% gain over March.
Sales at gasoline stations improved most dramatically because of the sharp rise in gasoline prices. But all categories of establishments showed gains except for miscellaneous retailers.
Households continue to spend despite a steep drop in consumer confidence, a steep loss in residential-real-estate wealth and declines in employment. Perhaps the economic stimulus package’s rebate checks are keeping everything afloat and consumer purchases will tumble when the rebates end. Maybe consumers will continue to spend despite their deteriorating circumstances and despite all the bad news.
We’ll see.
© 2008 Michael B. Lehmann
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June
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1 comment:
True - that's the headline number at any rate. YoY Retail Sales was 2.5%, which sounds good until you realize that last month's was 3% and 5% has been the healthier high end. xGas though it was only 1.2% while gas rose 13.8% YoY.
Worse, my estimates, of real retail sales YoY were -1.4%, which is recessionary. xGas it was -2.6%. And over the last six months real gas expenditures were 15, 19, 15.1, 15.5, 13.2 and 9.5%.
In other words real retail sales is dropping at an accelerating rate, more and more spending is shifting to gas and, because of rising gas prices, while share is up total is down. In other words people are spending more and more of their incomes on gas with less and less for everything else. And much worse aren't keeping it.
Which also implies that the rebates didn't even make a dent in gas spending let alone total consumer demand. Dutch boy, dike, big hole, small finger syndrome anyone ?
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