Retail Sales Were Very Weak in May Counting Negative Revisions

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via Mike Shedlock

If someone tell you the consumer is strong, please have them read this post. The strong consumer is all a mirage of inflation.

Nominal and Real (inflation adjusted by the CPI) retail sales chart by Mish.

The Bloomberg Econoday consensus expected retail sales would advance by 0.3 percent in May.

Instead, the Commerce Department reported 0.1 percent and downgraded April by 0.2 percentage points to -0.2 percent.

Advance Retail Sales Key Points

  • Advance Estimates of U.S. Retail and Food Services Advance estimates for May 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $703.1 billion, up 0.1 percent (0.4 percent) from the previous month, and up 2.3 percent (0.5 percent) above May 2023.
  • The March 2024 to April 2024 percent change was revised from virtually unchanged (±0.4 percent) to down 0.2 percent (±0.2 percent).
  • Total sales for the March 2024 through May 2024 period were up 2.9 percent (±0.5 percent) from the same period a year ago.
  • Retail trade sales were up 0.2 percent (0.4 percent) from April 2024, and up 2.0 percent (0.5 percent) above last year.
  • Nonstore retailers were up 6.8 percent (1.4 percent) from last year, while food services and drinking places were up 3.8 percent (2.3 percent) from May 2023.
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Mirage of Inflation

The key phrase above is “adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.”

It’s real (inflation-adjusted) sales that drive GDP. My inflation-adjusted charts show the vaunted US consumer is nothing more than a mirage of inflation. Nominal spending looks strong, but real spending isn’t.

Real Retail Sales Detail

That’s not exactly a paradigm of consumer spending strength.

Real vs Nominal Retail Sales Percent Change From Year Ago

Real retail sales are negative vs a year ago in 13 out of the last 18 months.

If someone tell you the consumer is strong, please have them read this post. It’s all a mirage of inflation.

Why Is Spending Weak?

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Spending is weak because consumers are tapped out. Rent is up at least 0.4 percent for 33 consecutive months draining everyone struggling month-to-month.

Pandemic savings are wiped out.

On June 13, I noted Initial Unemployment Claims Jump the Most Since August 2023

Many of us do not believe the allegedly strong jobs market.

Payrolls Rise 272,000 Employment Drop 408,000

The data is confusing and conflicting in many ways.

For discussion, please see Another Bizarro Jobs Report – Payrolls Rise 272,000 Employment Drop 408,000

Nonfarm Payrolls vs Employment Gains Since May 2023

  • Nonfarm Payrolls: 2,756,000
  • Employment Level: +376,000
  • Full-Time Employment: -1,163,000

In the last year, jobs are up 2.8 million while full-time employment is down 1.2 million

Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun

Unemployment is rising and job openings have crashed. It looks recessionary. Let’s investigate with a series of pictures.

For discussion please see Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun

 

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