Their parking lots may have been full over the annual Running of the Bulls Thanksgiving weekend, but they weren’t making as much money as many economists had predicted. While retailers saw a slight increase in sales, declining wages, lost jobs and economic uncertainty are taking their toll on American consumers:
Retail sales rose less than expected in November as a drop in receipts for food and beverages weighed against stronger sales of motor vehicles, tempering some of the expectations of a strong holiday shopping season.
Total retail sales increased 0.2 percent…
Economists polled by Reuters had forecast retail sales climbing 0.6 percent last month.
“It’s fairly disappointing given that all the evidence was pointing to fairly strong gains during the month,” said Millan Mulraine a macro strategist at TD Securities in New York.
Consumer spending – which accounts for more than two-thirds of U.S. economic activity – rose sharply in the third quarter but November’s retail sales growth was the weakest in any month since June.
Strong sales reports over that [Thanksgiving] weekend led some analysts to predict a strong overall season, although economists have warned the shopping frenzy may not carry through the holidays due to the nation’s still high unemployment rate of 8.6 percent.
A recent string of improved economic data in the United States have eased fears of recession, buying the central bank time to gauge the impact of Europe’s debt crisis on the U.S. economy.
Most of America is under the impression that our central bank has already gauged the strength of the American economy and our benevolent leaders have determined their is nothing to worry about. For months we’ve been told that the economy is recovering after having survived the worst crisis since the Great Depression. It turns out, however, that we are just buying time; kicking the can down the road a bit further.
November was supposed to be the blow-out month, the one that got us back on track. The American consumer, responsible for over half of all economic growth in this country, was supposed to return with a vengeance. The lackluster retail sales performance for November, however, is a clear indicator that all is not well.
Unemployment, though officially reported at 8.6%, is nothing more than a statistical sham, with over 20% of Americans actually unable to find meaningful labor. Perhaps if economists were looking at the right numbers they’d be able to make more informed forecasts.
Furthermore, those doing their duty to keep the American consumption engine lubricated are doing so not with income earned at higher paying, shovel ready jobs, but because they had savings available before things went sour in 2008 and because they have faith in the government’s assessments about this being a short-term transient economic blip:
The bad news is, that while the economy continues to fall into an abyss, the American consumer just doesn’t see it. To compensate for what many believe to be a short-term recessionary blip, consumers are maintaining their lifestyles by blowing through their savings and retirement funds:
More from the AP:
…economists worry that the spending can’t continue at the same pace. Over the summer, consumers spent more while earning less. Many had to dip into their savings to make up the difference.
“Overall, the economy appears to be growing at a decent clip,” said Paul Dales, a senior U.S. economist at Capital Economics.
Still, Dales added, “Consumption cannot grow at a faster rate than incomes indefinitely.“
Retail sales and GDP growth were supposed to have returned to normal levels by now. This was the assessment of mainstream economists in the private and public sector when the recession was in full swing in 2009.
The cheerleaders can scream as loudly as they want. Not even a bullhorn will help change the reality. This economic climate is not normal. Retail sales are not coming back. Not when the shadow statistics – those data that you’ll never hear a Washington politician or central banker share with you – are at or near Great Depression levels, and not while fully one-third of our nation is living in or on the edge of poverty.
Consumers have been hit from all sides. There’s not much more they can take. 2012 is going to be a rough year.