I thought all those Obama jobs, the millions of Obamacare enrollees getting “free” health insurance, and the plunge in gas prices would lead to billions of excess disposable income being spent on stuff. Considering consumer spending accounts for 68% of GDP, this juggernaut of jobs would propel the US economy to new heights. Keynesianism at its finest. But something went awry on the road to prosperity. The American people have stopped spending money they don’t have on shit they don’t need. The blathering boobs on the tube will use the tried and true weather excuse, except last winter was the winter of the polar vortex. The very same morons who reported that this past winter was the 15th warmest in recorded history, will use cold and snow during winter time as the reason the American sheeple didn’t shop. How could they possibly get to the mall in their leased four wheel drive SUVs, pickups, and minivans?
Retail sales have fallen three months in a row. The last time this happened was at the beginning of the 2008 financial collapse. Do retail sales fall three months in a row when the economy is booming, or does it do that when we are in a recession? And these haven’t been miniscule drops: December -0.9%, January -0.8%, February -0.6%. If we dig into the numbers we can assess the truth of our current situation:
- Retail sales have only grown by 1.7% versus last year. This is far lower than the real level of inflation.
- If you back out the subprime loan juiced auto sales, retail sales have grown by a pathetic 0.8% in the last year.
- The rapidly rising level of auto loan defaults and repossessions is leading to a decline in auto sales, as they fell 2.6% in February versus January.
- All the discretionary retailers – furniture, electronics, building materials – have seen sales fall over the last three months. How could this happen if we are having that strong housing recovery I’ve read about?
- In a positive development, the gas price plunge reversed, and you spent $500 million more for gas in February.
- Department store sales fell again and were $350 million lower than last year. The JC Penney, Sears death march slogs on.
- Things have gotten so bad, people are even drinking and eating out less. Makes you wonder how we can keep adding those Obama jobs – waitresses, bartenders, fry cooks.
- On-line retailing, which used to grow at 10% to 20% rates, has grown by 3.9% YTD. Maybe Amazon isn’t really worth $370 per share. It couldn’t happen to have anything to do with the government sucking the life out of the business by implementing sales taxes.
If you want to know the real reason average Americans aren’t spending, it’s because they don’t have anything left to spend after their pitiful wages increases, skyrocketing health insurance premiums, food bills, higher taxes, fees and tolls, and Yellen created inflation.
But don’t you worry. The people that really matter, Wall Street bankers, are doing fabulously well. Despite lower fraudulently achieved profits in 2014 than 2013, they have decided to increase their bonuses for a job well done. They are paying themselves $28.5 billion in bonuses for taking free money from their puppets at the Fed and then using it in markets they have rigged to make obscene phantom profits. Please note the slope of their bonus chart versus the slope of the average worker’s salary.
The American Dream achieved by the .1%.