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Retail Sales: Nothing New Under the Sun

By Charles Sizemore⋅ October 18, 2009 ⋅ ⋅ Post a comment

The Census Bureau Retail Sales Report reported nothing new under the sun (download here).

Auto sales plummeted immediately after the Federal “cash for clunkers” program expired (see chart below), and total sales ex-auto, while up slightly from August, were down significantly from the previous September.

Across the board, virtually all product segments saw declines from September 2008. Food, general merchandise, and sporting goods were more or less flat and health products were up slightly. But everything else was down, and generally by a lot.

So, while things are improving, we are still a LONG way from a full recovery.

Charles Sizemore, CFA
Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy

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Discussion

4 comments for “Retail Sales: Nothing New Under the Sun”

Charles,you confuse me.You write an entire 2 paragraphs on how everything in retail is down or flat (except for a minor rise in health products). And in the post just above this one you announce that there is no improvement until top line sales figures climb. But then you conclude that the economy is improving! What facts do you base this on? Are you seeing flat market segments as a positive sign?

Posted by cindy | October 19, 2009, 10:04 am
Charles,

This is one of many of your recent posts that has talked about the economy improving. Many have commented previously on how this contradicts the main emphasis of the Great Depression — that the economy is about to go into the toilet.

Why have you not commented or responded to this contradiction?

Is it the economy that is improving, or only the short term market?

Your silence in responding does not help confidence in your predictions.

Or are you waiting till the market makes a major move in either direction to validate one of your conflicting observations?

Posted by rlevy | October 19, 2009, 1:27 pm
Hey guys, I’ve been pretty consistent about this (see the “New Normal” thread: http://www.hsdent.com/blog/tag/new-normal/)

I believe we are still in a period of diminished demand that should last for several years. This is the “New Normal.” In this environment, there will be plenty of mini-booms and mini-busts, all within the context of a prolonged period in which demand is tepid at best. The best historical example I can give is 1990s Japan. Japan lugged in and out of recession for almost 20 years, but it didn’t go straight down.

The economy is recovering substantially from the near-absolute paralysis that struck in the months after the Lehman bankruptcy. But it is still FAR below its old levels of output, and it’s likely to stay at these underutilized levels for the foreseeable future.

Sorry if there was any confusion…it certainly wasn’t my intention to put out mixed signals.

Thanks,
CLS

Posted by Charles Sizemore | October 19, 2009, 3:03 pm
Charles,

Thanks for your post and response to the comments. It is just tiring for mainstreet to hear that the economy is improving when we see sales down, income and sales tax revenue down, housing permits down as-well-as completions, unemployment (especially U6) up and growing, foreclosures growing, shipping down(Ports of LA and Longbeach way down) and the list goes on and on. The only thing that seems up is the Market and that only due to the unprecidented hammering (and lack of suppor by the Fed) that the dollar is taking. The mainstreet, and I dare say the countries fundamental economy is not improving.

Posted by DavidBrown | October 20, 2009, 9:01 am