Tuesday, February 15, 2011

Retail Sales Reach Post-Recession High in January

The Census Bureau reported today that U.S. consumers set a new all-time monthly record by spending $381.5 billion on retail and food services in January.  Without adjusting for inflation, this was the second straight month since the recession started in December 2007 that consumer spending has surpassed the pre-recession, previous record-high retail sales volume of of $380.0 billion set back in November 2007.  

The highest-ever retail spending amount in January was 7.8% higher than the year-earlier level, and spending in every category except electronics and appliance stores (-0.3%), and department stores (-0.8%) registered annual gains last month, with especially strong gains in motor vehicles and parts (15.7%), building materials (8.7%), miscellaneous stores (+10.2%) and nonstore retailers (13.5%).  The 3-month retail sales total through January 2011 of $1.14 trillion is running 7.6% ahead of the same period a year ago.


At 2/15/2011 11:36 AM, Blogger morganovich said...

the key phrase here is:

"Without adjusting for inflation, this was the second straight month since the recession started in December 2007 that consumer spending has surpassed the pre-recession..."

but what if we include inflation?

The reported monthly gain of 0.3% in January 2011 retail sales matched the consensus estimate of the headline 0.3% inflation gain for January CPI-U (due for release on Thursday, February 17th.)

Along with January’s retail estimate came a downside revision to December’s monthly retail sales growth, from an initial 0.6% to 0.5%, where the December CPI-U was reported up by 0.5%. (The CPI-U is the inflation measure usually used to deflate retail sales.)

looks to me like this is inflation, not growth.

it's also interesting to see that CPI-U is so many multiples higher than either reported CPI or the GDP deflator (which it exceeds by nearly an order of magnitude).

At 2/15/2011 12:43 PM, Blogger juandos said...

Are we discussing this Census Bureau?

Well then that makes the Census Bureau every bit as credible as the New York Times...

This Obama agenda does have a track record of lying to foist off an agenda onto the American citizens...

Retail sale reach a new high or does stuff just cost more?

MIT "Billion Price Project" Confirms US Prices Surging (In Case There Was Any Confusion)

At 2/15/2011 12:55 PM, Blogger morganovich said...

taking the last monthly reading of inflation from the BPP of 0.74, you get annualized inflation of 9.25%.

this is all the more telling as it include january, which usually shows a seasonal drop from December.

isn't it interesting how much that is starting to look like the pre-1992 CPI figure and like the inflation we saw in food imports and exports (13.4 and 15.7% respectively) and the january import and export inflation we saw reported today (imports up 1.5% (19% annualized) and exports up 1.2% (15% annualized)?

the consistency of these other metrics is quite striking and just makes that case stronger that CPI and the GDP deflator are missing what is going on.

At 2/15/2011 12:58 PM, Blogger Buddy R Pacifico said...

"but what if we include inflation?"

World Banks says food prices at "dangerous levels".

Also, the World Bank says "global food prices have jumped 29% in the last year...". These are not U.S. statistics but we are in a global economy so...., Yikes.

At 2/15/2011 1:00 PM, Blogger morganovich said...

also, for those who were claiming that there is no food inflation, January food exports rose in price 3.2% (per the labor department).


assuming our food at him behaves similarly (and there is little reason not to) then that number exceeded to the forecast inflation for the whole year.

3.2% monthly annualizes to 46%.

that's some pretty heavy inflation.

even if our food went up by only 1/4 that much, that's still what, 10 times the forecast?

also note that import and export inflation were both roughly twice the forecast for jan...

At 2/15/2011 6:27 PM, Blogger PeakTrader said...

Even if food prices double this year, it won't add much to U.S. inflation.

For example, the food component of a box of cereal in the U.S. is a small proportion of its price.

Also, Americans spend less than 10% of their income on food.

If developing countries pay more for wheat, rice, corn, etc., then they'll have less to spend on beef, poultry, fish, etc., which may result in lower U.S. prices for those items.

Then there are fixed costs, e.g. mortgage and auto payments, which become relatively cheaper when nominal income rises.

After severe recessions, high real growth rates add little to inflation, and we haven't had high real growth.

It's likely in 2011, U.S. real growth will pick-up to 4%, while inflation remains around 2%, or 6% nominal growth.

Even Dr Doom is expecting low U.S. inflation-Nouriel Roubini's 2011 prediction:

•GDP growth in 2011 will most likely support a pace of job creation that will be barely capable of absorbing increases in the labor force and will fail to bring down the unemployment rate significantly.

•Inflation will remain well below the implicit 2% Fed target for core PCE for quite some time. This implies no change in Fed policy.

At 2/16/2011 9:44 AM, Blogger morganovich said...


you are presuming this is unfinished food, not ready to eat, which, as i have shown you in the past is not true. this inflation is mostly ready to eat food.

46% annualized X 10% = 4.6% inflation for the economy as a whole just from food.

you can talk about expectations and models all you want, but this is what is really happening.

inflation was 100% above estimates for imports and exports last month and an order of magnitude higher on food.

the BPP month is annualizing at over 9%, and those are internet prices which ought to have less inflation that the economy as a whole.

real retail sales have been been flat for 2 months with all the nominal gain coming from inflation that annualizes at over 5% (and that's according to the CPI-U, which is likely too low)

the map is not the terrain. models for the year are already looking ridiculously off and it's only 6 weeks in.

wake up and smell the (now much more expensive) coffee...

inflation isn't coming, it's already here.

At 2/16/2011 6:04 PM, Blogger PeakTrader said...

Morganovich, you say "January food exports rose in price 3.2%."

U.S. exports don't represent U.S. inflation. They represent U.S. income.

Also, you say "46% annualized X 10% = 4.6% inflation for the economy as a whole just from food."

You may want to try 2% X 10% = 0.2%:

US food price inflation lowest since 1992-USDA
August 25, 2010

USDA revised its food price prediction to an increase of 0.5 to 1.5 percent in 2010 from its prior forecast in late July that called for a rise of between 1.5 percent to 2.5 percent.


Post a Comment

<< Home