Courtesy of Karl Denninger of The Market Ticker
There's bad, there's awful, and then there's the retail sales number this morning.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $401.4 billion, an increase of 0.4 percent (±0.5%)* from the previous month and 5.8 percent (±0.7%) above January 2011. Total sales for the November 2011 through January 2012 period were up 6.3 percent (±0.5%) from the same period a year ago. The November to December 2011 percent change was revised from 0.1 percent (±0.5)* to virtually unchanged (±0.3%)*.
Pay close attention to that bolded part.
Why?
Grocery stores were 45,833. Last year was 44,538. Here's the problem — the CPI on food at home is claimed to be 6%, so the price-adjusted parity level is 47,210.
In other words this report sucks when adjusted for price changes on food — people are either unable or unwilling to maintain their food spending due to price changes. You pick, but the facts are what they are.
Gasoline is up 10% year over year as well. Gas station sales, however, went from 38,216 to 40,991 and should be 42,038 on a parity price basis. We have heard about a collapse in demand for gasoline — well, here's your proof folks, as on a gallons-sold basis it sure isn't going in the northbound direction. And gasoline is not used for heating purposes, so this is all travel (by car.)
No inflation effect on households eh?
That's not what this report says.
Deficit spending is responsible for this and the so-called "budget negotiations" are bullcrap. Deficit spending simply must stop.
Period.
