Posted on 04/21/2022 4:36:56 AM PDT by blam
American consumers are spending more, getting less, and borrowing more to fund this involuntary spending spree.
Retail sales in March were 7% higher than they were in the stimulus-fueled March of 2021, but thanks to inflation, they didn’t get as much bang for their buck.
Seasonally adjusted, retail sales were up 0.5% month-on-month in March at $677 billion.
As WolfStreet put it, “Stimulus Miracle March 2021 was a very tough month to beat. But Americans did blow by it. What they didn’t do is blow by the now raging inflation.”
Unsurprisingly, higher gasoline prices accounted for the bulk of that increase in retail sales as consumers pulled back in other areas. Online sales fell for the second straight month. It was the first back-to-back decline in online sales in over a year.
Increasing retail sales is usually viewed as a good sign for the economy. It signals that consumers are confident and able to spend money. Reuters reported that the pickup in consumer spending is “helping to underpin the economy.”
This is just wishful thinking. Paying more and getting less does not “underpin” an economy.
In a high inflation environment, surging retail sales tell a different story. Consumers spend more because they have to. This is an involuntary spending spree. American consumers are spending hand-over-fist in an effort to keep up with surging prices.
Since retail sales are expressed in dollar amounts, they reflect both units sold and rising prices. That means there are two ways retail sales can go up.
1.Consumers buy a larger quantity of stuff.
2.The price of the stuff they’re buying goes up.
In other words, just because dollar widget sales increase doesn’t mean people bought more widgets. It could be that they bought fewer widgets but paid more for them.
This is exactly what’s happening in many retail sales segments.
You can see clearly see the pain from rising prices when you look at individual categories in the Consumer Price Index Data.
The CPI for durable goods was up 17.4% year-on-year in March, even with a month-on-month drop of 0.9% thanks to a sharp drop in used vehicle prices after a massive spike.
The CPI for nondurable goods was up a blistering 3.8% in March and up 13.1% year-over-year.
When up put a 7% increase in retail sales in the context of these rapidly rising prices, it doesn’t look so good. Americans are spending a lot more money and they’re getting a lot less for it.
And in order to keep up with surging prices, Americans are turning to plastic. Revolving credit, primarily credit card debt, rose by a whopping 20.7% in February. That helped fund a 0.8% increase in February retail sales – revised up in the latest data from 0.3%.
This raises an important question: how much longer can over-indebted consumers keep paying these upward-spiraling prices? Especially given the fact that the Fed is now raising borrowing costs?
They can’t. Savings are running dry and credit cards have limits.
They’re going to have to start cutting back on many buying a lot of stuff just to keep up with the rising cost of necessities.
This does not bode well for the economic future.
It's gonna blow and when it does, fights at Popeye's, McDonald's, etc. are going to pale by comparison as to what is going to happen, especially with several million more immigrants with highly tuned theft, assault and murder skills flooding into the country. All of your self-defense tactics and plans will be no match for those folks.
For just ONE example. One of my brothers-in-law showed me a nasty trick. You have a large rag or towel in your hand. You walk up to the person you don't like and throw it up in his/her face. His/her hands instinctly reach up to get it off of his/her face and you punch the living hell out of the person's solar plexus (hands were up, remember?), or, stab, or shoot. I had never thought of that. They have a thousand low-tech ways to beat your high-tech. Strict immigration control is the only solution. Told Jim Robb and the bunch in Austin at a meeting years ago...illegal immigration was going to be THE problem.
Gas doubled in price. We didn’t buy more gas but GDP goes up. Yeah. Right. Sure.
Oh, please stop the histrionics. So pathetic. Not all illegal immigrants are like that. Not even half. Stop stoking fear. Adapt, improvise, overcome adversity. Or just claim all is lost. Your choice.
It would be nice if you quit trying to tell people what to think and say. You're pathetic! If you don't like it...just stay away. Stop censoring.
I’m not censoring.
I”m being critical of a post that is almost 100% doom porn. An example - an unqualified statement that “All your self-defense tactics and plans will be no match for those folks.” What an ignorant claim.
Nothing but doom. No adapt-improvise-overcome. Just doom.
The amount of fear and doom without any countering force on so many threads is meant to demoralize. Thankfully, more and more FReepers are onto this.
So no, I won’t stay away.
You’re a disruptive little piss-ant.
LOL!
I’ll continue to look for ways to adapt, improvise and overcome challenges and problems.
You do… whatever it is you do.
Good luck.
Now, go over to the car racing threads and tell them that they shouldn't be talking about car racing because you don't like it.
It's censoring.
In the newer Sherlock Holmes, he’s fighting for money and does a handkerchief toss in the face and then beats his ass.
Not only are you paying more but for packaged items you are buying a smaller quantity.
Right after the 86 amnesty I knew we (citizens of the USA) were screwed. Boy was I right.
bkmk
Yeah, I know it makes the economy look better because sales are still up, but we are not going to short ourselves just to try to make a point and make biden look bad. He’s doing just fine on that all by himself.
Good for you. Exactly what I'm doing. I'm just glad I bought all my lawn mower blades, belts, etc last year.
Windshield wiper blades for my truck are $70.00...wow.
We’re doing it with chainsaw parts, among other things.
IIRC, the 86 amnesty was The Pig Kennedy’s baby.
238-173 in the House.
63-24 in the Senate.
Reagan signed it into law.
Wiki FWIW: The Immigration Reform and Control Act altered U.S. immigration law by making it illegal to hire illegal immigrants knowingly and establishing financial and other penalties for companies that employed illegal immigrants. The act also legalized most undocumented immigrants who had arrived in the country prior to January 1, 1982.
We used to be a republic of laws.
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