via Mike Shedlock
The answer to the question appears to be yes, starting October of 2023. Six pictures of real vs nominal advance retail sales tell the story.
Every month the commerce department reports Advance Retail Sales.
Advance estimates of U.S. retail and food services sales for February 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $700.7 billion, up 0.6 percent from the previous month, and up 1.5 percent above February 2023. Total sales for the December 2023 through February 2024 period were up 2.1 percent from the same period a year ago. The December 2023 to January 2024 percent change was revised from down 0.8 percent to down 1.1 percent.
I highlighted the key line “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”
GDP depends on real (inflation adjusted) sales, not nominal sales. Also note the negative revision. “The December 2023 to January 2024 percent change was revised from down 0.8 percent to down 1.1 percent.”
Real vs Nominal Detail Broad Brush Notes
- Nominal sales peaked in September of 2023 at 705,304. It’s now .65 percent to 700,727. But it’s the real calculation that matters
- Real sales peaked in May of 2022 at 234,066 but strongly recovered from a big dip. The more recent high was September of 2023 at 229,525. It’s now down 1.85 percent in the last 5 months to 225,275.
Real vs Nominal Retail Sales Since 1992
Real vs Nominal Retail Sales Percent Change From Year Ago 2024-02
In the past 16 months, year-over-year real sales were only positive 4 months.
Real vs Nominal Retail Sales Percent Change From Month Ago
In the last 22 months, real month-over-month retail sales were above zero only 8 times.
Nominal Advance Retail Sales Percent Change Month-Over-Month Breakdown
In nominal terms, sales look pretty good except for January of 2024. But that’s a mirage.
Real Advance Retail Sales Percent Change Month-Over-Month Breakdown
Real sales are very weak dating to October of 2023.
Mentally average motor vehicles for the last two months for a better mental image. Motor vehicle sales are recorded when the manufacturer ships cars to the dealer, not when the consumer buys them.
Even nonstore sales (think Amazon) are struggling. Nonstore sales have been a big ping-pong starting August of 2023: down 0.7, up 0.9, down 0.4, up 0.2, up 1.0, down 0.6, down 0.5. That’s down 4 months and up 3 months. The total up months add to 2.1 and the total down months add to -2.2.
Economic stress is showing, especially in younger age groups.
Credit Card and Auto Delinquencies Soar
Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.
Record High Credit Card Debt
Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.
For nearly all age groups, serious delinquencies are the highest since 2011.
Auto Loan Delinquencies
Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.
For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39
Generational Homeownership Rates
The above chart is from the Apartment List’s 2023 Millennial Homeownership Report
Those struggling with rent are more likely to be Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.
The same age groups struggling with credit card and auto delinquencies.
On Average Everything is Great
Average it up, and things look pretty good. This is why we have seen countless stories attempting to explain why people should be happy.
Krugman Blames Partisanship
With the recent rise in consumer sentiment, time to revisit this excellent Briefing Book paper. On reflection, I'd do it a bit differently; same basic conclusion, but I think partisan asymmetry explains even more of the remaining low numbers 1/ t.co/4lqm7X4472
— Paul Krugman (@paulkrugman) February 17, 2024
OK, there is a fair amount of partisanship in the polls.
However, Biden isn’t struggling from partisanship alone. If that was the reason, Biden would not be polling so miserably with Democrats in general, blacks, and younger voters.
This allegedly booming economy left behind the renters and everyone under the age of 40 struggling to make ends meet.
Many Are Addicted to “Buy Now, Pay Later” Plans
Buy Now Pay Later, BNPL, plans are increasingly popular. It’s another sign of consumer credit stress.
For discussion, please see Many Are Addicted to “Buy Now, Pay Later” Plans, It’s a Big Trap
The study did not break things down by home owners vs renters, but I strongly suspect most of the BNPL use is by renters.
What About Jobs?
Another seemingly strong jobs headline falls apart on closer scrutiny. The massive divergence between jobs and employment continued into February.
Payrolls vs Employment Gains Since March 2023
- Nonfarm Payrolls: 2,602,000
- Employment Level: +144,000
- Full Time Employment: -284,000
For more details of the weakening labor markets, please see Jobs Up 275,000 Employment Down 184,000
CPI Hot Again
For discussion of the CPI inflation data for February, please see CPI Hot Again, Rent Up at Least 0.4 Percent for 30 Straight Months
Also note the Producer Price Index (PPI) Much Hotter Than Expected in February
Major Economic Cracks
There are economic cracks in spending, cracks in employment, and cracks in delinquencies.
But there are no cracks in the CPI. It’s coming down much slower than expected. And the PPI appears to have bottomed.
Add it up: Inflation + Recession = Stagflation.