While 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 suggested 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:
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.
It Took 22 Years to Get to This Point
The head of the Canadian province of Ontario, Doug Ford, has warned that it will retaliate against...
The Israeli military is preparing to strike nuclear missile sites in Iran. Israel claims that the...
This article was originally published by Michael Snyder at The Economic Collapse Blog. What in...
Commenting Policy:
Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn’t immediately available. We’re not trying to censor you, the system just wants to make sure you’re not a robot posting random spam.
This website thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.
I am sure the actual true retail sales are way down from a year ago. What the Commerce Dept released is nothing but a coverup and lie. It is theoretically impossible that retail sales are even flat. Millions of people have been laid off in the past 12 months. Credit has contracted on a month by month basis. Home equity loans have beencut.  Many are getting unemployment checks and the amounts are much lower than they used to get. Rail traffic is dramatically lower. Tell me how is it even possible that retail sales are not down at least 25% in reality.ÂÂ
What most readers have to realize is that any government data released are lies.ÂÂ
Hear Hear, Matt!
If these numbers from the Commerce dept are anything like the 3rd quarter GDP numbers, they’ll be revised down two or three more times in the next few months…
We’ll see what the retailers say in coming weeks, but my guess is that it won’t be pretty and the losses should be much more pronounced than what we are seeing from today’s official numbers.
I am not suprised at all , My Wife works at Wal-Mart and she has told me traffic in her store was way down in December . Folks have maxed out their plastic , have no more equity in their homes and have to live on cash , so its cut back time . With even more to follow .
Airborne, it’s funny you mention that, because I had a similar conversation with my wife about Walmart. While it was busy, I don’t remember it being as slow in prior years — This year I was able to push my cart through the aisles. I went to WM on several occasions and same thing each time. Again, the parking lot was full or close to it, but it just didn’t seem as busy.
This could just be confirmation bias at work on my part, however.
http://www.youtube.com/watch?v=rSjK2Oqrgic
…and just for good measure…
http://www.youtube.com/watch?v=UMRo5XCKddQ
Classic Rick, classic!
You are not Biased at all Mac , You have it right . And to top it off , Most of the WMs have cut back on employees as well . So we see less customer service at stores . But thas not just at WM . all retailers have done that .
You know, I always knew about government lies. But, years ago it seemed to me that on the important stuff, they seemed to feel a responsibility to tell mostly the truth with only some spin. But now they simply lie. They have an agenda and nothing is more important than that. If people die, starve, get crushed by the economy, whatever, the agenda is all that matters. Which is funny because I think the ones that are steering the ship now called, time after time they called the bush administration out, on how they were creating poverty in Iraq and Afghanistan. Now, however, they have brought the poverty home. Thanks Hope and Changers! We really appreciate it!
I too see the economy crumbling. Just today I took a trip to a city 200 miles away. On the way back my driver and I were going to stop at a gunshop. Unfortunately, it was closed because of a gun show in the area. We started looking around at adjacent strip malls. VACANT! VACANCIES EVERYWHERE! …where a year ago there were only a few empty slots. Even a Wal-Mart, the holy grail of retailers, closed a store there.
This economy is in bad shap and getting worse.