Retail Sales Keep Rising

[Alpha8472]

Stores are seeing increased sales. The labor market is strong and wage growth is robust. People are spending except at gas stations.

https://www.nytimes.com/2023/02/15/busi ... ation.html

[storewanderer]

Prices are up 10-20% across the board from last year. Yes, sales are "up." What about tonnage? Foot traffic?

[ClownLoach]

Sales are up 3% for January. The article quotes "trends" of slowing inflation, but acknowledges inflation can contribute to those figures. Couple that with A) a heck of a lot of anecdotal data where it seems January had the largest number of price increases in groceries, restaurant food, building materials, furniture, and basically everything else since the inflation crisis began, and B) the fact that it takes longer for the government to determine the inflation rate than to determine if sales are truly up or down.

I expect to see that when inflation is calculated that there was a "surprising increase" indicating its moving back in the wrong direction.

Traffic definitely seems to be down. Valentines day merchandise did not sell this year at all, mountains of clearance at the stores that sell it. Usually TVs are in short supply after the Super Bowl - manufacturers try to deliver the new year models around March 1st. Definitely a glut of the 2022 models on the market still and seeing lots of aggressive clearance pricing. Furniture at the wholesale clubs has reached an all time high in pricing, last summer's $2499 mega couch is $3297 "on clearance" for the winter 2023 version and I'm seeing patio sets pushing $3000 which is total insanity. Furniture is totally priced by the cubic footage of the box right now and stores are struggling to price it since wholesale cost on two couches the same size are neck and neck due to the fact they're spending more on transportation than manufacturing. Leather trimmed furniture is sometimes $100 or less difference vs plain cheap cloth on many large chairs, couches etc.

The entire inflation issue has nothing to do with interest rates and everything to do with the fact that we are in a new energy crisis that the government doesn't want to acknowledge. The high energy prices are driving up the cost of everything else and if the government admits this is the real cause of the problem they'll also immediately get the (well deserved) blame for it.

[BillyGr]

Traffic definitely seems to be down. Valentines day merchandise did not sell this year at all, mountains of clearance at the stores that sell it.

Must be one of those things that varies from place to place - the few stores I have been in so far since the holiday have had fairly little stuff left (like one table or shelf worth, maybe the most was a small island display where it was one side of that).
Note these are supermarkets, drug stores and dollar store type places, not Walmart or similar, but they all have a decent size area for these items normally.

[mjhale]

Sales are up 3% for January. The article quotes "trends" of slowing inflation, but acknowledges inflation can contribute to those figures. Couple that with A) a heck of a lot of anecdotal data where it seems January had the largest number of price increases in groceries, restaurant food, building materials, furniture, and basically everything else since the inflation crisis began, and B) the fact that it takes longer for the government to determine the inflation rate than to determine if sales are truly up or down.

I expect to see that when inflation is calculated that there was a "surprising increase" indicating its moving back in the wrong direction.

Traffic definitely seems to be down. Valentines day merchandise did not sell this year at all, mountains of clearance at the stores that sell it. Usually TVs are in short supply after the Super Bowl - manufacturers try to deliver the new year models around March 1st. Definitely a glut of the 2022 models on the market still and seeing lots of aggressive clearance pricing. Furniture at the wholesale clubs has reached an all time high in pricing, last summer's $2499 mega couch is $3297 "on clearance" for the winter 2023 version and I'm seeing patio sets pushing $3000 which is total insanity. Furniture is totally priced by the cubic footage of the box right now and stores are struggling to price it since wholesale cost on two couches the same size are neck and neck due to the fact they're spending more on transportation than manufacturing. Leather trimmed furniture is sometimes $100 or less difference vs plain cheap cloth on many large chairs, couches etc.

The entire inflation issue has nothing to do with interest rates and everything to do with the fact that we are in a new energy crisis that the government doesn't want to acknowledge. The high energy prices are driving up the cost of everything else and if the government admits this is the real cause of the problem they'll also immediately get the (well deserved) blame for it.

I have to wonder if the "hidden truth" of real retail sales with inflation factored in will not be widely reported if it is reported at all. There is a physiological effect to everything sales wise going up to the average American. That tells them everything is "okay" we should continue in our usual retail spending patterns. However if it ever came out in very specific terms that retail sales were down year over year when factoring in inflation that has a "busting" effect to one's thought process leading down the road of doom that we really are in a recession. Add to that the much high costs for energy and you have a potential political issue as well. We will eventually have to transition off of fossil fuels but you can't just pull the plug on Day 1 and expect on Day 2 everyone is going to drive electric and it will be just the same as it was before. Just from my personal circles people are sick of the price increases and high fuel prices. However, there is low confidence in either political party actually fixing anything. That causes us just to limp along like we always have...

[buckguy]

Sales are up 3% for January. The article quotes "trends" of slowing inflation, but acknowledges inflation can contribute to those figures. Couple that with A) a heck of a lot of anecdotal data where it seems January had the largest number of price increases in groceries, restaurant food, building materials, furniture, and basically everything else since the inflation crisis began, and B) the fact that it takes longer for the government to determine the inflation rate than to determine if sales are truly up or down.

I expect to see that when inflation is calculated that there was a "surprising increase" indicating its moving back in the wrong direction.

Traffic definitely seems to be down. Valentines day merchandise did not sell this year at all, mountains of clearance at the stores that sell it. Usually TVs are in short supply after the Super Bowl - manufacturers try to deliver the new year models around March 1st. Definitely a glut of the 2022 models on the market still and seeing lots of aggressive clearance pricing. Furniture at the wholesale clubs has reached an all time high in pricing, last summer's $2499 mega couch is $3297 "on clearance" for the winter 2023 version and I'm seeing patio sets pushing $3000 which is total insanity. Furniture is totally priced by the cubic footage of the box right now and stores are struggling to price it since wholesale cost on two couches the same size are neck and neck due to the fact they're spending more on transportation than manufacturing. Leather trimmed furniture is sometimes $100 or less difference vs plain cheap cloth on many large chairs, couches etc.

The entire inflation issue has nothing to do with interest rates and everything to do with the fact that we are in a new energy crisis that the government doesn't want to acknowledge. The high energy prices are driving up the cost of everything else and if the government admits this is the real cause of the problem they'll also immediately get the (well deserved) blame for it.

I have to wonder if the "hidden truth" of real retail sales with inflation factored in will not be widely reported if it is reported at all. There is a physiological effect to everything sales wise going up to the average American. That tells them everything is "okay" we should continue in our usual retail spending patterns. However if it ever came out in very specific terms that retail sales were down year over year when factoring in inflation that has a "busting" effect to one's thought process leading down the road of doom that we really are in a recession. Add to that the much high costs for energy and you have a potential political issue as well. We will eventually have to transition off of fossil fuels but you can't just pull the plug on Day 1 and expect on Day 2 everyone is going to drive electric and it will be just the same as it was before. Just from my personal circles people are sick of the price increases and high fuel prices. However, there is low confidence in either political party a

Actually fixing anything. That causes us just to limp along like we always have...

Month to month changes in sales or prices are kindof meaningless by themselves. You have to look at trends over longer periods of time and that has been more difficult to do over the last 3 years. The other issue is that popular media mostly doesn't really do a good job with economics---and basically anything with numbers which is why the health and science coverage also is pretty bad. You have one clump of very partisan media that has an agenda for screaming Inflation is=n scare quotes and another clump that is basically infortainment that tends to turn anything from a mild snow storm to the price of eggs into armageddeon. Eggs are still expensive but gas has been dropping, but it's the eggs that get the headlines. If you don't buy a lot of eggs (I don't), then it's not that remarkable.

There's also a conventional wisdom about how consumer demand, employment and inflation vary that's been upended over the last couple decades and even moreso during COVID-----the economy can tolerate fuller employement than has been the case in the past and inflation was kept down until recently despite demand. Inflation has been going down since summer, employment has increased more than expected, and consumer demand has remained robust. The winter sales for clothing have come earlier because of the warm weather and mostly it seem slike teh usual January stuff--linens, furnishings, etc. I spoke to someone about new TV installations recently and the Thanksgiving to New Years peiod was as busy as ever. The one thing that has kept inflation from dropping more for many people is housing which has shot up and kept increasing even in places having a bubble like Atlanta or Miami.

I follow several bloggers who are economists and ithings mostly have gone in the direction they predicted---easing in inflation that probably didn't need as much of the interest rate correction by the Fed as predicted. Housing is the one area where it will take more time for change to occur--if you own and don't plan to move, it becomes a non-issue; if you rent it's a problem esp. in hot markets or in polaces where AirBnB has sucked some of the capacity out of the rental maket.

Energy prices are more of a problem in Europe than elsewhere and that's the actual conclusion of the Apollo reprort that's been widely cited (rather than global armageddon that's been inferred). The warm winter has tempered this and bought time for them to move ahead with shifting their energy sources. Renewables are now cheaper than fossil fuels in many places and for many uses which means that the not really existent energy crisis is unlikely to happen. What's impressive to me is that I am seeing more places to charge vehicles--in the last 6 months they've popped up on city streets in DC near municpal offices, in hotel parking lots, shopping centers, commercial parking garages, turnpike rest stops and Wawas. Only some of these were the result of legislation, while others like Wawa joing Sheets in having them is more indicative of a commercial trend.

[BillyGr]

The warm winter has tempered this and bought time for them to move ahead with shifting their energy sources. Renewables are now cheaper than fossil fuels in many places and for many uses which means that the not really existent energy crisis is unlikely to happen. What's impressive to me is that I am seeing more places to charge vehicles--in the last 6 months they've popped up on city streets in DC near municipal offices, in hotel parking lots, shopping centers, commercial parking garages, turnpike rest stops and Wawas. Only some of these were the result of legislation, while others like Wawa joining Sheets in having them is more indicative of a commercial trend.

It only makes sense - the same way that it took time for gasoline stations to become common after cars using that were created, it is taking time for the electric stations to become common as more cars that need them are being sold and used.

Surprising that so many people were surprised that it would work that way, given the example from 100+ years ago

[storewanderer]

Month to month changes in sales or prices are kindof meaningless by themselves. You have to look at trends over longer periods of time and that has been more difficult to do over the last 3 years. The other issue is that popular media mostly doesn't really do a good job with economics---and basically anything with numbers which is why the health and science coverage also is pretty bad. You have one clump of very partisan media that has an agenda for screaming Inflation is=n scare quotes and another clump that is basically infortainment that tends to turn anything from a mild snow storm to the price of eggs into armageddeon. Eggs are still expensive but gas has been dropping, but it's the eggs that get the headlines. If you don't buy a lot of eggs (I don't), then it's not that remarkable.

There's also a conventional wisdom about how consumer demand, employment and inflation vary that's been upended over the last couple decades and even moreso during COVID-----the economy can tolerate fuller employement than has been the case in the past and inflation was kept down until recently despite demand. Inflation has been going down since summer, employment has increased more than expected, and consumer demand has remained robust. The winter sales for clothing have come earlier because of the warm weather and mostly it seem slike teh usual January stuff--linens, furnishings, etc. I spoke to someone about new TV installations recently and the Thanksgiving to New Years peiod was as busy as ever. The one thing that has kept inflation from dropping more for many people is housing which has shot up and kept increasing even in places having a bubble like Atlanta or Miami.

I follow several bloggers who are economists and ithings mostly have gone in the direction they predicted---easing in inflation that probably didn't need as much of the interest rate correction by the Fed as predicted. Housing is the one area where it will take more time for change to occur--if you own and don't plan to move, it becomes a non-issue; if you rent it's a problem esp. in hot markets or in polaces where AirBnB has sucked some of the capacity out of the rental maket.

Energy prices are more of a problem in Europe than elsewhere and that's the actual conclusion of the Apollo reprort that's been widely cited (rather than global armageddon that's been inferred). The warm winter has tempered this and bought time for them to move ahead with shifting their energy sources. Renewables are now cheaper than fossil fuels in many places and for many uses which means that the not really existent energy crisis is unlikely to happen. What's impressive to me is that I am seeing more places to charge vehicles--in the last 6 months they've popped up on city streets in DC near municpal offices, in hotel parking lots, shopping centers, commercial parking garages, turnpike rest stops and Wawas. Only some of these were the result of legislation, while others like Wawa joing Sheets in having them is more indicative of a commercial trend.

You seem to have missed the news from Thursday. Inflation continues to be higher than expected. Now there is talk of 3 more Interest rate increases in the coming months and major banks are even predicting it now.

Also the big problem I see right now is that electricity and natural gas for many consumers is up 40%+ from last year in rate. This is a real problem that cripples people's ability to spend on disposable junk that many retailers are offering, or discretionary purchases like entertainment and restaurants, and you can feel it in talking to people who are living on a budget or run into circumstances with other surprise expenses (sudden health issue or car repair for example) happening in tandem with the sudden unexpected jump in utilities. If I have a 2 floor 2,200 square foot dwelling (house, apartment doesn't matter) my electric bill is now approaching $300 a month and that is keeping the heat at 68 at all times. Last year that bill was comfortably under $200.

But the consumer sitting here complaining about how their electric bill is up $100 from the same month last year has nothing on the business owner who is paying to light thousands of square feet, heat thousands of square feet, keep a pizza oven turned on for 11 hours during open hours, etc... that bill is going up hundreds or thousands of dollars a month from last year. That is the difference between a few employees... or even staying open entirely... and yes many businesses really do run on that tight of a shoestring.

Also I am reading as the gas price goes down, people are starting to observe that it is cheaper to buy gas than charge an electric vehicle. So you may not want to cheer for that gas price to fall much further... the only way EVs happen is if there is a long term sustained period of high gas prices $4+ in the middle US and $5+ in the west. But what REALLY costs everyone money and accomplishes nothing is the start stop start stop nature of all of this stuff. A few months ago it looked like we were going great guns toward EVs. Now gas is falling again and we are starting to hear cracks in that idea already. At the end of the day I am afraid whatever happens is going to simply cost the consumer and taxpayer more. But start-stop-start-stop- costs the most and accomplishes nothing.

[veteran+]

VERY valid points!

[BillyGr]

Also the big problem I see right now is that electricity and natural gas for many consumers is up 40%+ from last year in rate. This is a real problem that cripples people's ability to spend on disposable junk that many retailers are offering, or discretionary purchases like entertainment and restaurants, and you can feel it in talking to people who are living on a budget or run into circumstances with other surprise expenses (sudden health issue or car repair for example) happening in tandem with the sudden unexpected jump in utilities. If I have a 2 floor 2,200 square foot dwelling (house, apartment doesn't matter) my electric bill is now approaching $300 a month and that is keeping the heat at 68 at all times. Last year that bill was comfortably under $200.

Interesting how that is happening some places and not others (or is it just some parts of the billing, like the gas vs. the electric?).

For instance, we have electric and oil for heating. While the oil is, of course, much higher (though the company here offers a deal where you know in advance of the season the max price you'll pay, and if the market goes above you don't pay more, but if it goes lower you get that lower price), the electric isn't.

Looking at early Nov-early Dec (the way they bill, think it was the 8th to the 8th of those months) for 2021 and 2022, the bill in 2022 was about $12 more, and used just one more KWH of power than the earlier year. So, it is up a bit, but nothing like what other areas are seeing. The more current bills are not compatible, as the house was not in use several days a week last year from Jan-Mar, thus the bills were very low (like $70) - in fact, it was the first time their report showed us in the best category, usually it's in the middle one!

This is about the same size you mention, just all one level rather than two. Aside from the heat (which uses some electric in addition to oil to run the circulation part), electric does everything else (stovetop/oven, washer/dryer, hot water), and the totals of those bills were $111 and $123 (with change on both).