Census Bureau Reports Fictional Nonsense About Retail Sales
by ilene - July 14th, 2010 4:50 pm
Census Bureau Reports Fictional Nonsense About Retail Sales
Courtesy of Mish
Today the Census Bureau posted its Advance Monthly Retail Sales and Food Services Report for June 2010.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $360.2 billion, a decrease of 0.5 percent from the previous month, but 4.8 percent above June 2009.
Total sales for the April through June 2010 period were up 6.8 percent from the same period a year ago. The April to May 2010 percent change was revised from -1.2 percent to -1.1 percent.
Retail trade sales were down 0.6 percent from May 2010, but 5.0 percent above last year. Nonstore retailers sales were up 12.1 percent from June 2009 and gasoline stations sales were up 8.8 percent from last year.
Hogwash
The only believable number in the report is gasoline sales. Otherwise the problem is in Census Bureau methodology.
The advance estimates are based on a subsample of the Census Bureau’s full retail and food services sample. A stratified random sampling method is used to select approximately 5,000 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms. Responding firms account for approximately 65% of the MARTS dollar volume estimate.
The methodology misses stores that went out of business and have no retail sales. Circuit City is a prime example but also note that thousands of small strip mall stores are now shuttered as well. Some of that volume went to the surveyed stores making it appear sales went up.
The only accurate way of computing retail sales is to look at state sales tax data. Even then, tax data can be misleading because one needs to factor in changes in tax policy, notably states increasing sales tax rates.
For example, a rise in the sales tax rate from 7% to 8% would result in a 14% increase in sales tax collections (all other things being equal).
The Rockefeller Institute reports "The growth in state tax revenues is not an indication of broad state fiscal recovery, but is mostly driven by legislated changes [massive tax increases] in two states — California and New York."
Please see Rockefeller…
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DiggHeh Where Are The Sales?
by ilene - July 14th, 2010 2:02 pm
Heh Where Are The Sales?
Courtesy of Karl Denninger at The Market Ticker
But I thought we had an economic recovery underway?
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $360.2 billion, a decrease of 0.5 percent (±0.5%)* from the previous month
Heh, that’s not so good. Ex-autos sales were down -0.15%, implying what we’ve already seen reported: auto sales have gone in the tank.
But that’s not the only place we found bad news. Building materials were down about 1%, and, interestingly, so were food and beverage stores (about 1/2%.) Gasoline sales were down 2%, while clothing stores, general merchandise and electronics were up slightly.
All in all not a disastrous report – but definitely not a strong one either. The market reaction was immediately negative, although the move (about 1/2% southbound) wasn’t dramatic.
The evidence continues to mount that the economy is, indeed, slowing once again.
Three Mish Segments on Tech Ticker, on Stimulus, Retail Sales, the Markets, Alternatives
by ilene - July 9th, 2010 3:03 pm
Three Mish Segments on Tech Ticker, on Stimulus, Retail Sales, the Markets, Alternatives
Courtesy of Mish
Yesterday I recorded three segments on Tech Ticker from downtown Chicago, hooking up with Joe Weisenthal at Nasdaq.
From Yahoo!Finance Michael "MISH" Shedock: Stimulus Will Fail Like It Always Does
There’s no hotter debate right now than stimulus vs. austerity, as folks like Paul Krugman and even Barack Obama call for more spending to fix the economy.
Michael "MISH" Shedlock is not having any of it, arguing that the financial pump has failed, and that the only way to get the economy back on track is to pursue a policy of less government, and less spending, with a special focus on reforming pensions, public sector unions, and other institutions that drain the government of its resources.
As evidence: Japan. The country has now seen multiple decades of recession despite massive pumping on both the fiscal and the monetary side.
But at least Japan hasn’t had a debt crisis yet, right? The key word there, says Mish is "YET." The fiscal situation in Japan is getting more and more tenuous, and it’s no sure thing that the market will retain its confidence in the Japanese government’s ability to finance its debt. And of course the same thing could happen here.
But for now in the US the big risk is deflation, which you can see in housing and other economic categories. Spending won’t solve this problem; actual economic adjustment is what’s needed to start growing again.
There are two more short segments that play back-to-back if you click on the top link.
Thanks Joe, that was a lot of fun.
As a followup to the discussion on retail sales, please consider Did Retail Sales Rise or Did Tax Rates Go Up?
Following Yesterday’s Hype of Fastest Growth in 4 Years, June Retail Sales a “Mixed Bag”
by ilene - July 8th, 2010 7:23 pm
Following Yesterday’s Hype of Fastest Growth in 4 Years, June Retail Sales a "Mixed Bag"
Courtesy of Mish
The Wall Street Journal reports Retailers Turn in a Mixed Bag for June Sales.
U.S. retailers reported mixed results for June, with some stores benefiting from aggressive promotions and others hurt by consumers’ continued restrained spending.
Retailers from department stores to teen retailers responded to limited demand with increased markdowns. Big sales during June are common as retailers try to clear shelves for fall merchandise, especially back-to-school apparel. But a number of analysts are calling June’s discounting steep.
"Many retailers pulled out all of the stops with respect to promos in June," said Brian Sozzi, retail analyst at Wall Street Strategies. "During our store walks throughout the month, the level of promotions picked up relative to previous months."
"Sales in electronics, video games, music and movies were particularly soft for the month," said Target Chief Executive Gregg Steinhafel. "We continue to plan our business cautiously." Target said it expects July same-store sales to be up in the low single digits.
Retailers were forecast to report 3.2% growth at stores open at least a year, according to the 28 companies tracked by Thomson Reuters. The estimate compares with a 4.9% drop last year. Same-store sales are considered a key barometer of retailers’ health because the figures allow clean comparisons as opposed to overall sales because store numbers fluctuate.
"We’re almost treading water compared to the building spending momentum we saw at the beginning of the year," said Mike Berry, director of industry research at MasterCard Inc.’s Spending Pulse unit. "At the beginning of the year, people were anticipating good news and spending increased. When economy didn’t turn around, consumers took a step back."
Retail Winners Exceeding Expectations
J.C. Penney Co. (JCP) sales +4.5%
Macy’s (M) sales +6.5% w
Nordstrom (JWN) sales +14%
Ambercrombie & Fitch (ANF) sales +9%
Retail Losers Not Meeting Expectations
Target (TGT) sales +1.7% vs. expectations of +2.7%
Kohl’s (KSS) sales +5.9% vs. +6.5% expected
Teen retailer Wet Seal (WTSLA) sales -3.6%
Gap (GPS) sales flat
Retail Sales Synopsis
Those numbers may seem pretty good but June sales benefited from a late Memorial Day that pushed sales into June. Moreover, June is normally a stronger month than May. More importantly, note how estimates were ratcheted lower…
ECRI TURNS NEGATIVE
by ilene - June 11th, 2010 5:37 pm
ECRI TURNS NEGATIVE
Courtesy of The Pragmatic Capitalist
Via Barrons:
The Economic Cycle Research Institute today offered up its view of last week’s “weekly leading indicators,” a closely watched private mailing, today showed a dip in the indicator for the week ended last Friday to 123.2, a decline of 3.5%, in contrast to the 0.3% rise the preceding week.
The Institute’s Lakshman Achuthan, however, remarked that “While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat.”
The ECRI notice follows better-than-expected consumer confidence data this morning from the University of Michigan, but also a smaller-than-expected gain in business inventories in April, this morning’s weak retail sales data for May and, of course, last Friday’s disappointing jobs number.
Anemic Retail Sales; Strength of Consumer Recovery Overstated
by ilene - June 11th, 2010 3:16 pm
Anemic Retail Sales; Strength of Consumer Recovery Overstated
Courtesy of Mish
Economists never expect bad news. Once again they were surprised by weak economic reports, this time by poor retail sales. Bloomberg reports Retail Sales in U.S. Fall as Consumers Boost Savings
Sales at U.S. retailers unexpectedly dropped in May, signaling consumers boosted savings as employment slowed and stocks fell.
Purchases decreased 1.2 percent, the biggest drop since September 2009, following a 0.6 percent April gain that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.
Companies reined in hiring last month, making it likely households will keep a lid on spending, which accounts for about 70 percent of the economy. Discounters Target Corp. and TJX Cos. were among merchants reporting gains in May sales, indicating households are looking for bargains to stretch out their paychecks.
“The strength of the consumer recovery was overstated,” said David Sloan, a senior economist at 4Cast Inc. whose forecast of a 0.7 percent decline was the lowest among economists surveyed. “I don’t think things are going into a nosedive. The economy is in recovery. The outlook is still moderately positive.”
Retail sales were projected to increase 0.2 percent, according to the median estimate of 76 economists in a Bloomberg survey. Forecasts ranged from a decline of 0.7 percent to a gain of 1 percent.
The decrease in demand wasn’t broad-based, with five of 13 major categories showing decreases last month, led by a 9.3 percent plunge at building-material stores.
The decrease at building-material stores followed an 8.4 percent jump in April and a gain in March that may have reflected a surge in appliance sales propelled by a provision of the government’s stimulus package last year that provided rebates for purchases of more energy-efficient products.
Purchases of automobiles dropped 1.7 percent last month, counter to industry figures. General Motors Co. and Ford Motor Co. posted U.S. sales increases in May that topped analysts’ estimates as higher consumer confidence and inexpensive gasoline spurred customers to buy more sport utility vehicles.
“We’re ramping up production to meet continued strong demand for all of our launch vehicles as well as other products,” Stephen Carlisle, vice president for U.S. sales at GM, said
…
There’s a Slow Train Coming
by ilene - June 5th, 2010 9:33 am
There’s a Slow Train Coming
Courtesy of John Mauldin, Thoughts from the Frontline Weekly Newsletter
There’s a Slow Train Coming
A Negative 2% GDP in the Third Quarter?
Small Business Still Has Issues
Italy, Paris, Vancouver, and San Francisco
And a Forbes Cruise to Mexico
Sometimes I feel so low-down and disgusted
Can’t help but wonder what’s happenin’ to my companions,
Are they lost or are they found, have they counted the cost it’ll take to bring down
All their earthly principles they’re gonna have to abandon?
There’s a slow, slow train comin’ up around the bend.- Bob Dylan
The question before the jury is a simple one, but the answer is complex. Is the US in a "V"-shaped recovery? Are we returning to the old normal? A great deal hinges on the answer, and this week we look at some of the evidence before us.
But first, a follow-up thought to last week’s letter. I wrote about why countries can reduce their private debt, reduce their public debt, or run a trade deficit, but not all three at the same time. If a country wants to see its government run a fiscal surplus (or small deficit) and at the same time its private citizens want to reduce their leverage (common desires throughout the developed world), it must run a trade surplus. That’s a simple accounting statement. If you did not read last week’s letter, you can get to it by going here.
That brings up the deepwater gusher in the Gulf. That it is an unmitigated disaster is an understatement. There is the possibility of the oil getting into the Gulf Stream and going around Florida and landing upon the Atlantic coast. We will be cleaning this up for years.
I am at the moment on a plane to Italy, but if memory serves me right, we run about a $300-billion-dollar trade deficit just in energy purchases. Our trade deficit has been coming down in most other categories but is fairly steady with respect to oil. And as noted above, if we want to get to a place where we are in control of our government deficit, we must reduce that trade deficit.
Bluntly, we cannot hope…
SpendingPulse Reports Retail Sales Drop 2 Percent; UCLA Ceridian Commerce Index Drops .3 Percent; Recovery Has Stalled
by ilene - May 13th, 2010 1:30 pm
SpendingPulse Reports Retail Sales Drop 2 Percent; UCLA Ceridian Commerce Index Drops .3 Percent; Recovery Has Stalled
Courtesy of Mish
Inquiring minds are reading the April SpendingPulse™ Retail Sales Report provided by MasterCard Advisors.
Kamalesh Rao, Director of Economic Research for MasterCard Advisors SpendingPulse, reported that following three months of steady, month-to-month growth averaging about 2%, total U.S. retail sales ex-auto stopped to catch its breath in April, falling by 2% since March on a seasonally adjusted basis. Taking out gasoline, the month-to-month number performed better, rising 0.3%, also on a seasonally adjusted basis, but not as strong as the 1.5% average of the previous quarter.
“Although there were pockets of strength, for example double digit growth in luxury sales and eCommerce, retail sales overall seemed to have lost some momentum in April. However, this is not untypical of a recovery, which will happen in fits and starts, rather than by taking a direct path,” noted Rao.
Year-over-year growth for total retail sales ex-auto also dipped slightly, cooling to 6.1% compared to the 6.9% growth of March. Added Rao, “This slight drop still puts retail growth at relatively healthy levels, especially when you compare it to the losses of last year.” Excluding gasoline the same trend holds: April saw retail sales ex-gasoline grow at a 3.6% year-over-year clip, down slightly from the 4.2% growth of March.
Retail Sales Statistics
Those stats reflect all retail sales, including cash, not just MasterCard transactions.
Ceridian-UCLA Pulse of Commerce Index™ Drops 0.3 Percent in April
Please consider Ceridian-UCLA Pulse of Commerce Index™ Drops 0.3 Percent in April
With the release of April’s figures, the Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management is showing flat, overall performance during the first four months of 2010. The PCI in April fell 0.3 percent, suggesting the economic recovery may have stalled, although an uptick in consumer spending could continue to drive a slow but steady recovery.
Year-over-year growth of 6.5 percent in the PCI marks the fifth straight month of steady increase at “better than normal” levels. However, year-over-year growth of 10 to 15 percent in the PCI is required to drive down the unemployment rate.
While the economy continues to climb year-over-year, the PCI indicates that expectations in the market for a robust recovery may be too optimistic. The PCI closely tracks the Federal
…
PARTS OF THIS MARKET ARE LOOKING IRRATIONAL
by ilene - April 16th, 2010 4:49 pm
PARTS OF THIS MARKET ARE LOOKING IRRATIONAL
Courtesy of The Pragmatic Capitalist
I haven’t thought the 75%+ rally was particularly irrational over the course of the last 12 months. Surprised by the strength? Absolutely. But irrational, no. As of late, we’ve begun to see signs that the consumer is back, but the equity action implies that the consumer is not only back, but ready to break records. In late 2006 I wrote a letter that said:
“So here we sit with a relatively healthy economy, signs of inflation and record housing prices. Sounds pretty good, right? Not so fast. The markets could certainly move higher if housing doesn’t collapse, but we see very few scenarios in which that can happen. When the housing market slows consumers will spend less and businesses will begin to suffer. The US economy will then fall into a recession and European and Asian countries will quickly follow suit as the world’s greatest consumers wilt under the environment of low liquidity and higher debt….The credit driven housing bubble remains the greatest risk to the equity markets at this time.”
I said the market was due for a potentially crippling recession as the yield curve inverted, consumer balance sheets were turned upside down, and a housing bubble was brewing. Just days before the market crashed in 2008 I said the market had all the ingredients for a crash. In late 2008 I said the market had overreacted and would likely revert towards the mean in 2009 for a total return of 18%.
The day before the market bottom in March 2009 I said government intervention would likely generate an equity rally. But I did not come close to predicting that we were on the precipice of a 75% 12 month move. Not even close. On the other hand, I have never thought the move was particularly irrational and didn’t fight the tape through 2009.
I was very constructive on the market heading into 2010 and maintained that stimulus, strong earnings and an accommodative Fed would result in higher stock prices in H1. I point this out not because I am trying to toot my own horn or gloss over my many imperfections (many can be emphasized), but overall I have been able to not only foresee the macro mechanics driving the market, but have also done a fine job translating that into…
MarketWatch Says “U.S. Consumers Are Back”, Mish Says “Show Me The Money”
by ilene - April 9th, 2010 5:23 am
MarketWatch Says "U.S. Consumers Are Back", Mish Says "Show Me The Money"
Courtesy of Mish
MarketWatch is reporting March sales are fresh signal that U.S. consumers are back
U.S. retailers’ March sales rose by their highest percentage in more than a decade, another sign that U.S. shoppers are back spending beyond what they need.
Total March sales rose 9.1%, the highest since data began to be compiled in 2000, with 92% of reported numbers topping Wall Street expectations, according to Thomson Reuters. International Council of Shopping Centers reported sales rose 9%, their highest since March 1999.
With the benefit of Easter falling this year on April 4, and thus being included as part of retailers’ March reporting month, instead of April 12 last year, they also said combining retailers’ March and April results would be a better gauge of shoppers’ spending power.
From high-end retailers Saks Inc. (SKS) and Nordstrom Inc.(JWN) to discounters Costco Wholesale Corp. (COST) and Target Corp. (TGT), same-store sales gains of more than 10% were seen across the board.
Easter Bonus
Yahoo!Finance says Shoppers hand retailers a basket of Easter cash
Shoppers are finally coming out of hibernation.
Better weather and an earlier Easter enticed Americans to shell out for spring clothes in March, the fourth straight month of gains for retail sales. Target, Macy’s, Gap and the parent of Victoria’s Secret all beat Wall Street expectations.
The improvement was broad, spanning discounters, mass merchants, specialty stores and luxury retailers. The gains offer strong evidence that people are feeling more confident in the economic recovery and are more willing to spend.
Retailers had several factors on their side. The earlier holiday combined with comparisons to notoriously weak sales in March 2009 had analysts expecting solid improvements. But it’s also clear that shoppers’ mindset is changing.
"There was a lot of talk about the frugality of the American consumer and that the recession taught people to save more," said Sherif Mityas, a partner in the retail practice at management consultant A.T. Kearney. "But U.S. consumers have short-term memories."
Before anyone gets excited about same store sales, please ponder the effect store closings had on comparisons.
31 Retailers File For Bankruptcy In 2009
- Penn Traffic:11/18
- Hackett’s Department Store: 11/10
- InkStop: 10/1
- Sacino & Sons: 9/11
- Samsonite: 9/2
- Escada: 8/13
- Finlay: 8/5
- Bashas: 7/12
- Crabtree & Evelyn: 7/1.
- Best & Co: 6/26
…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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