April Retail Sales Soiled The Bed Sheets

Perhaps the perma-bullish Wall Street analysts should contribute to retail sales by stocking up on Depends – like the Merrill Lynch analyst who forecast retail sales to climb 0.7% ex-autos. Retail sales, preliminarily, were said to have declined 0.2% from March.   The “core” retail sales group – retail sales not including autos and gasoline – were flat. Wall Street’s finest expected a consensus 0.4% gain.

I say “preliminarily” above because, if you scan the Census Bureau’s report you’ll note “asterisks” in several major line items.

This means that “advance” numbers were not available for those retail sales categories.  Thus, the CB guesstimates the number based on past numbers for that category.  It also means the Census Bureau can overestimate that category for headline purposes with the intent to revise lower in future reports.

Retail sales numbers are reported on a nominal basis.  If they were to be adjusted by a real rate of inflation, the month to month decline from April likely would have approached at least one half of one percent.

Funny thing about the guesstimate for new car dealer sales.  The OEM’s report actual deliveries to new dealers every month.  I would have to believe that new car dealers have highly automated sales tracking software. It would seem that the Census Bureau should be able to have a fairly accurate data sample and estimate for April new car dealer sales well before the middle of the following month. But using the (*) enables the Government to manipulate the number into a favorable outcome for the “advance” report.

We know that the average household – i.e the 80-90% of all households – are struggling under the weight of record monthly debt service requirements on a record amount of consumer debt. This plight is made worse by the fact that real wages are declining.  Not to judge Wall Street analysts harshly (said sarcastically), but it should be obvious that retail sales were going to show a decline in April.  Imagine how bad the actual number must be if the Government has to release a guesstimated report showing a nominal decline.

In my weekly Short Seller’s Journal, I present detailed analysis of weekly economic reports. In addition, I provide specific short ideas along with suggestions for using options to short stocks synthetically. You can learn more about this newsletter here:  Short Seller’s Journal information

One thought on “April Retail Sales Soiled The Bed Sheets

  1. S.T.B.
    It’s not an STD.
    Cleaning the sheets won’t help. Neither will a shot of penna.
    Just as there’s a nearly inexhaustible amount of BS available to tell us everything is awesome, there is an equally inexhaustible amount of gruesome statistics that tell us things are not so rosy… We ain’t seen nothing yet.
    2007-2009 is not a good guideline for what is coming our way. And 2008 nearly broke the world. Neither 1992 nor 2001 are up to the task of informing us of what’s going to hit the world.
    If a person wants to believe the words that issue from a horse’s rump, so be it. I prefer solid data and not road apples when it comes to the realities of 2019 and 2020 will bring.

    John Rubino’s very good podcast with Greg Hunter made an impression on me. Part of that podcast spoke to the networthectomies we of a certain age suffered in 1987, 1992, 2001 and 2008. Each epic event in which we stayed the course cost us half our net worth. It was like a divorce; a time when the spouse gets half. In these crashes we thought it would not be that bad. Yet it was that bad and for some even worse.

    In so many ways most of us suffered through these calamities, mustered on, thinking this was normal personal or business economic cycle. Yet these cycles were not normal. They were the result of excesses that were abnormal in any business cycle, exacerbated by the actions of the central banks and those who used these devastating cycles to expand their net worth at our expense because we though the cycle was normal even as we saw our financial fortunes vaporized.

    If there is anything to be said for being at the effect of gross swings in the economic cycle that is not one of a normal cleansing action, if you are of a certain age and have regained some of your family fortune, as fortunes might be, this is a time to move most of your chips off the table.
    The table is rigged and everything you have built to date is at risk again
    If you believe the soothsayers and snake oil peddlers that this time is different, be sure it is different.
    This time it’ll be 75% or more; even 100%, if your leverage is even a modest 50% in a loan to value equation

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