Except at Gas Pump, Not Much Spending Going On

Today’s chart porn is courtesy of the NYT’s Floyd Norris:

"AMERICANS are cutting back on purchases of things they do not have to have, sending retail sales down sharply at many types of stores.

Those cutbacks, which now seem to be worse than at any time since the 1990-91 recession, are helping to slow the economy and to spur calls in Washington for more fiscal stimulus even before the government starts to send out money to most taxpayers next month.

Those checks could provide at least a temporary stimulus, but until they arrive, the slowdown in spending appears to be nationwide.

In its beige book report on economic conditions released this week, the Federal Reserve said that surveys by the 12 regional Federal Reserve banks found that “consumer spending was characterized as softening across most of the country.” The Fed said that in 10 of the 12 districts, spending on things other than cars was down, while car sales were generally reported to be flat or declining."

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0419bizchartsweb

courtesy of NYT

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Source:
Except at Gas Pump, Not Much Spending Going On
FLOYD NORRIS
NYT, April 19, 2008
http://www.nytimes.com/2008/04/19/business/19chart.html

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What's been said:

Discussions found on the web:
  1. surferdude commented on Apr 19

    amazing yoy charts. yet the equity market stampedes ahead as if this over, go figure.

  2. chris noyes commented on Apr 19

    Barry – As far as shorting a company is there more or less risk based on market cap ? I found a small bank that could be a great short .(market cap just over 100 million ). They where in bed with a hugh builder/ Realtor in a overprice market ( they are in the middle of rehabbing a getto zip code ). I just spent this morning driving thru the area and alot of neighborhood are half finish. There nothing selling in there. Anyway thanks in advance .

  3. Estragon commented on Apr 19

    Maybe I’m misunderstanding, but the caption under the second chart (YoY retail sales x-gas stations) says “Inflation adjustment is based on Consumer Price Index for commodities”.

    Why would you reduce sales x-gas with a commodity inflation adjustment? Wouldn’t CPI less energy be more appropriate?

    As a more general observation, it’s worth noting that price based increases are concentrated in goods that are easy to hoard by proxy through futures markets, but difficult and costly to hoard directly (food, fuel, etc.) outside their commercial channels.

  4. Estragon commented on Apr 19

    Chris Noyes,

    FWIW, I’ve found days to cover (i.e. outstanding short interest / average daily volume) to be at least as important as market cap. Market cap will include varying amounts of relatively illiquid shares (institutional, restricted, etc.) which may not be available when you want (or more importantly need) to cover the short.

  5. Ross commented on Apr 19

    Just returned from Lowes. Bought a new gas weedeater for the ranch. They sell 4 cycle now so no more mixing oil. QUEWL!

    The place was a morgue. More blue vests than customers.

    On a lighter note, there are increasing food riots in the poorer countries of the world. I suspect that some major hoarding is taking place in the less perishable items like rice, dry beans, pasta and maybe sugar. Twenty countries have embargoed grain exports including Argentina. Farmers planting intentions there are actually down from last year. Not a good sign…

    About the chart above. It is somewhat misleading but a good directional ‘tell’.

  6. Sandra McArdle commented on Apr 19

    While all the numbers are interesting, with the likelihood of gas prices continuing to increase (with no reasonable alternative in sight) it seems to me any way that it is likely that we will see a return of people to city centers. Financial interests will encourage people to work out alternatives to the long drives that so many of us do in the course of our day.
    I know personally that I have already changed my previous shopping behavior and now patronize grocery stores closer to home. Instead of driving 12 miles one way to the grocery of my choice, I now go to alternative stores about 7 miles one way. A total of 10 miles round trip…about $40/trip. Like many I live in a suburban location, there is nothing in the way of services within a three mile radius.
    I am lucky in that I live close to work (about 3 miles), but the majority of those I work with drive more than 20 minutes to work…figuring out the recent increase in prices…how long will they be able to continue to do this without either cutting back on other expenditures or moving closer??
    Like most locales, my local area is not made for convenience or fuel efficiency. There is no mass transit, shopping is located too far away. Entertainment and restaurants those things that bring us together are even farther.
    Perhaps I am wearing dark glasses, but I see a lot of pain and shifts in our future, that especially for those on the cusp of financial viability.

  7. Winston Munn commented on Apr 19

    Ross,

    Keep in mind that revolution is a “hot weather” activity so look for the repercussions of hoarding rice to hit in late July/early August.

  8. Ross commented on Apr 19

    Winston, not so!

    I used to kid my Russian friends that their October Revolution occured using the Old Church Slavonic calender. Their revolution actually took place in November! Krasnia Oktiabra. ‘The Hunt For Red November?’ I need a beer…

  9. ferd mertz commented on Apr 19

    hey, wait a sec, you forgot to mention that everyone is taking all dough left after fillup to buy a RIMM smartphone or 2 or 3. right? recession proof for sure. they need that thing to check for job offers, new rental housing after foreclosure, etc. note: RIMM market cap now 61.8% that of NOK! course, look how NOK earnings sucked this week. i believe every word jim Ball-silly sez

  10. me commented on Apr 20

    “it is likely that we will see a return of people to city centers.”

    Great point Sandra. I just saw an article about can we afford to live in the suburbs.

  11. bsneath commented on Apr 20

    One small problem with the “back to the city” wishful thinkers. Simple supply and demand. The cost of a city dwelling is far higher than its suburban counterpart. If you are rich, no problem. However, if you are making ends meet on the wages of a teacher, nurse, police, civil servant, service worker, etc. etc., then city living is not even a consideration.

    I suggest that many suburban dwellers will first buy more efficient vehicles and change their driving habits. Also, telecommuting, internet shopping, and job migration out to the suburbs will occur.

    Don’t get me wrong, higher energy costs and the desire for a more social lifestyle will revitalize cities. Just don’t buy into the “suburbs are dead” mantra of the PC crowd.

  12. bsneath commented on Apr 20

    Back on topic, the chart on consumption is exactly as it should be. We have been over consuming clothes, electronics, furniture, autos, home improvements, jewelry, etc. We must shift to a more balanced economy where we pay the real costs of food, energy and the basics and where we produce more goods and services for the rest of the world in order to repay our debts. It is as it needs to be!

  13. Glenn commented on Apr 20

    the equity markets are in a “sucker’s rally” which will play out in the coming months and begin to reflect the market’s real future which is down.

  14. Juan commented on Apr 20

    Hi Ross,

    Do your Russian friends know anything about St Petersburg, 9 January, 1905 and events thereafter?

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