Retail Sales in U.S. "Unexpectedly" Stagnate

[marmar]

(Bloomberg) Retail sales in the U.S. unexpectedly stagnated in August as a lack of jobs restrained shoppers, highlighting the risk the economy will stall.

The unchanged reading followed a 0.3 percent gain for July that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg News was a 0.2 percent rise.

Chains like Best Buy Co. and Target Corp. (TGT) are saying a struggling labor market that’s battered confidence is hurting sales. The dim outlook for household spending, which accounts for about 70 percent of the economy, means it will be harder for the two-year old recovery to gain speed, giving the Federal Reserve reason to take additional steps to spur the expansion.

“Consumers are being more cautious given all the economic headwinds,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “Policy makers have to be focused on growth because growth seems to have come close to stalling in August.” ............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-09-14/retail-sales-in-u-s-unexpectedly-stagnate-as-lack-of-jobs-damps-spending.html

[WI_DEM]

1. Unless the economy begins to turn around, I think President Obama will lose

in 2012. I know that many people don't believe any of the asshats on the GOP can beat him, but people are frustrated and the GOP has a way of appealing to the basest emotions. I think Romney will be the nominee and even though he sent jobs abroad he will position himself as a Washington outsider with business experience who will create millions of jobs. The MSM will eat it up and the sheeple will buy it.

Obama gave a good jobs speech but he should have been on top of the jobs issue from day one and he wasn't.

[The Genealogist]

26. Perhaps...but

first Romney has to win the nomination of his party. That is going to be his uphill battle.

[MrsBrady]

2. unexpected....really?

People are not being "cautious" as the article states...they don't HAVE anything to spare to go shopping.

duh :eyes:

[emilyg]

9. .....

[taught_me_patience]

16. "Unexpected" does not mean what you think it means

It simply means that actual didn't match the forecast. The forecast is a collection of 83 economist's forecast... it is not meant to be an exact foreacast. You will get "unexpected" for almost every forecast... don't get hung up on semantics.

[BR_Parkway]

33. So basically a collection of 83 economists is wrong for the XXX month in a row?

Because every month they seem to be predicting a small uptick, renewed confidence and tons of other buzz word heavy statements that don't match reality. Simply saying that recovery is just about to happen in the hopes that people follow through and go shopping seems like a pretty crappy plan. People have nothing left to spend so they're learning to make do.

[girl gone mad]

34. It means pretty much what people think it means.

Of the 83 economists surveyed, only 4 got it right, and only 2 missed on the downside.

The vast majority of economists surveyed were overly optimistic and were expecting much better results.

[Odin2005]

40. Most of those idiot economists probably think you MMT guys are evil heretics!

"OMG, they dared to say that deficits are not evil! BURN THE HERETICS!!!" :rofl"

:hi:

[onyourleft]

47. In other words...

...they couldn't have "foreseen" that people without employment cannot buy "stuff."

[GoCubsGo]

3. And, the incessant "gloom and doom" prognostications by the MSM...

...and the likes of Bloomberg ALL SUMMER LONG, had nothing to do with it. Nope. Nuh uh. :eyes:

[marmar]

4. I think people having no money probably has more to do with it, n'est-ce pas?

nt

[GoCubsGo]

13. Many people have money.

They're hearing gloom and doom and fearing for they're jobs, so they aren't buying anything. Why would anyone spend money if they're being told incessantly that we're headed for another recession, and that this company is going to lay off 5000 people, and that bank is firing 30,000 and blah, blah, blah, blah..?

[AverageJoe90]

14. I have a feeling you're right.

I've suspected the same for a while now, in fact.

[Claudia Jones]

17. you have to be kidding

I think people are accurately perceiving that they are in trouble. They are not imagining being unemployed, they are not imagining living costs going up, they are not imagining declining wags and job insecurity. It is pure Wall Street propaganda and magical thinking to say that if only people believed they were doing better everything would be fine.

If anything, the MSM is downplaying the depth and scope of the crisis.

[Starry Messenger]

18. Who has money?

The economy is genuinely in the toilet, it's not *hearing* doom and gloom--we're living in it.

[Mosby]

21. I heard on the tv this morning something that actually made sense

They said that people in their 20s and 30s who lost their homes are moving back in with their parents and are not buying much especially big ticket items like washers, dryers and TVs.

[Literate Dragon]

25. It's interesting to me

that when it comes to the economy, and maybe other subjects where numbers are important, a lot of people think in binary: on-off, when they need instead to be thinking in terms of more-less.

Sure, many people have money. The problem is that many people also don't. And that means, overall, less money is being spent than needs to be in order to keep the economy sound. Looking around and seeing that "many people have money" is only a critique of this in terms of binary thinking, under which either nobody has any money or somebody does, and there is no consideration of how many people have how much.

The whole problem is that wealth and income in our economy is, and has been for a long time, maldistributed. Too much is going to those at the top, and that means not enough is available for the rest of us. Real wages have stagnated, good jobs have been lost, too much investment is either being made overseas to take advantage of cheap foreign labor or going into financial shell games instead of real wealth creation. That left the economy precariously balanced on an inadequate base of consumer demand, propped up by unsustainable consumer borrowing. The first serious financial hiccup to the system brought the whole house of cards crashing down.

Long-term, there is only one cure: redistribute wealth. Raise wages, lower the income of the super-rich and raise that of the poor, working class, and lower middle-class, and deep-six the idea that we can have rich people accumulating unlimited private fortunes and also have a sound economy that benefits everyone. Those two things are mutually exclusive.

[Javaman]

28. Oh really? how about you give me some of yours, money bags?

what a ridiculous comment.

[Odin2005]

41. Bullshit. PEOPLE DON'T HAVE ANY MONEY.

Unless you think everyone who makes under $50,000 are not people.

[nadinbrzezinski]

48. 125k for the post office

Hubby works at one of the target plants

You think I should go on a shopping spree?

:crazy:

[femrap]

27. oui. nt

[frylock]

10. uh probably less so than the fact that people aren't fucking working..

just a hunch.

[GoCubsGo]

12. And, why aren't they working?

Because nobody is hiring, because nobody is spending money at their businesses, because they're hanging onto it because all they hear is gloom and doom. Just a hunch.

[frylock]

15. so point out the silver lining..

because i don't see it.

[Odin2005]

43. No, it's because PEOPLE DON'T HAVE ANY.

[zalinda]

45. It is a vicious circle

If you have no customers, you don't hire more people. The more people you don't hire, the less is bought. It used to be that there was easy credit around, and so people spent. Now, that easy credit is gone, and the job market is so bad, less people are spending.

It's common sense, really. I know that the economy is bad when a very popular restaurant (I mean waiting in line for 1/2 hours to get table busy), is now advertising with a coupon in a throw away ad sheet. In 25 years, this is the first time I have every seen an ad from this restaurant, let alone a coupon.

It is bad. You have to get out of where you are living and look around at all the empty store fronts, in surrounding areas.

zalinda

[Javaman]

29. So the increasing poverty rate is just bullshit right?

and the corporations still making record amounts but not raising salaries is more bullshit right?

it's all the citizens fault.

:eyes:

[frylock]

31. hunh?

beg pardon, but how the fuck did you get that from my post?

[Javaman]

32. My bad, wrong spot.

apologies.

[frylock]

36. it happens..

peace!

[Claudia Jones]

22. those Cubbies of yours

No doubt the dismal performance by the Chicago Cubs over the last, oh say 100 years or so, has been caused by a lack of faith on the part of the fans. It could not have anything to do with management, with those in power. The fans just don't believe in the Cubs hard enough. And then the MSM is constantly reporting on every Cubs loss in great detail and with alarmist scary rhetoric! That just discourages fans and then the fans - those lazy, apathetic, low-information losers - sit home and don't buy tickets and don't come out to the games. They have no one to blame but themselves! And then they are always bad-mouthing the Cubs and being negative. Don't they know that the Cubs are the best we can do, are far better than the alternative, and are the lesser of two evils? When the fans don't buy tickets, management has less money and so cannot buy the best talent. This is the world we live in whether you like it or not. Sure in a perfect world the Cubs would be winners, but it is time we faced reality. Some people want a World Series win and they want it right now, and when they don't get it they just whine and complain.

[dixiegrrrrl]

5. "No one could have foreseen...."

that if you lay off millions of people, and inflate price of fuel and food, they might spend less money at the stores.

Nope, that was a shocker, sure enough.

[leveymg]

6. Why are professional economists always the last to admit that the system is failing?

Lies, damn lies, and statistics. Somebody pays to produce them. Somebody's job is always on the line in manufacturing.

At least there's one sector maintaining statistically full employment:

[Claudia Jones]

30. that is what they are paid to do

They are paid to defend the system. Those who do not are marginalized and driven off the air and out of academia.

[Odin2005]

38. Professional economists are the modern version of royal court philosophers...

...defending the Divine Right of Kings.

[nadinbrzezinski]

51. Not all

Roubini, Krugman ...

:hide:

[Arctic Dave]

7. As son as our economy switched to debt driven consumerism it was bound to fail.

This isn't unexpected at all.

[Blue_Tires]

19. funny how none of the major league pundits on CNBC or wherever seem to get that

[no_hypocrisy]

8. Not universally. Missoni merchandise desperately purchased yesterday.

In a scene that was reminiscent of the shopping frenzy that typically comes on the day after Thanksgiving, Target's website crashed several times throughout the day and more than a hundred shoppers lined up at many of its stores early in the morning on Tuesday for a sale of limited offerings of its Missoni for Target collection of bikes, luggage, clothes and housewares.

The 400-piece line made by the Italian luxury knitwear designer Missoni exclusively for the cheap chic retailer features its trademark zigzag patterns for between $2.99 for stationary and $599.99 for patio furniture - a fraction of the price of the designer's real duds that can go for $595 to $1,500.

"This was Missoni mayhem," said Joshua Thomas, a Target spokesman. "This is unprecedented."

http://www.wjla.com/articles/2011/09/missoni-s-line-for-target-sells-out-crashes-site-66518.html

[frylock]

11. a lot of those people are looking to resell on ebay..

what i heard on the radio this morning. lots of new mossoni stuff up on ebay today.

[Arugula Latte]

42. Those Missoni patterns remind me of the afghans my grandma crocheted in the 70s.

Not sure I'd want to wear that busy, busy stuff.

[TygrBright]

20. "As Gawd is my witness, I thought turkeys could FLY!" n/t

[FiveGoodMen]

23. Right out of left field and just perfect.

:rofl:

[Johnson20]

24. One of the

funniest lines ever on TV. I wounder how many folks know where it cames from.

[begin_within]

35. And the game of Monopoly "unexpectedly" ends when one player accumulates all the assets.

[Odin2005]

37. "Unexpectedly"? Why is it ALWAYS "unexpectedly"?

Economists are all a bunch of moronas.

[TwilightGardener]

39. I am flabbergasted that 70% of the economy is me and you buying shit.

That's just sad.

[marions ghost]

44. yeah, I wonder if it's this way in other countries?

say China, Europe, Australia? I really don't know much about macroeconomics, but I agree, it seems kind of stupid to base an entire economy on consumption. Because even if you have a choice whether to over-consume or not (which people increasingly don't) you are stimulated to consume as a way to improve the economy. So you have an economy that cannot afford a serious downturn & goes critical.

Since shopping is the Number One American recreational pastime (sad fact), I have to conclude that NOT shopping is the result of NOT having any money.

I've never been much of a shopper myself, am very aware that is an aberrant thing in America. But the people I know who do shop frequently are going without because they are afraid of job loss, skyrocketing costs of various commodities, loss of retirement funds, etc.....they don't consider it a noble cause.

(just comments)

[TwilightGardener]

46. I don't know if it's the same way in other economies, either. But you

are pointing to something important--how do we get out of the vicious cycle we're in, if the economy is based on household spending, and fewer households can afford to buy shit... which leads to more job loss, which means even fewer households buying shit... which means even further job loss... there doesn't seem to be a way out of this.

[marions ghost]

49. That's how I see it too

I'm not sure we really have time to ramp up industries that don't depend so much on consumption of good & services--not in enough time to prevent a serious spiral.

--------------------
When I googled "consumption based economy" this article came up--it's from (shudder) October 2008:

"...It will be difficult and painful, but we have to spend less and produce more goods and services that other economies around the world want to buy. We also need to replace these other economies as investors in our own economy.

This probably means that the U.S. government needs to identify some key industries that it will nurture as the potential big exporters of the future. There used to be many objections to this sort of "industrial policy," but perhaps now that much of our financial system has been nationalized, such interventions will seem relatively mild. We're already investing in the automobile industry, for example, although I'm not sure that's our best bet for future exports. Tom Friedman is probably correct in saying (in Hot, Flat, and Crowded) that environmental technologies would be one of the best possible industrial policy investments for the U.S.

Another attribute of the consumer-driven economy we've built is that we have generally taken the proceeds of our productivity in—you guessed it—increased consumption. This is unlike our European cousins, who have cashed in productivity for leisure. Americans work some of the longest hours in the world, and we don't even have enough time to watch the cool flat-screen TVs we've bought. My guess is that we'd all be happier and more relaxed if we started trading increased productivity for increased time on the beach.

There are many other aspects of our new economic house that need to be renovated, but that would take a book, not a blog post. There need to be more regulation, greater investment in human capital, increased transparency and understandability, better health care at a lower price to the society, and so forth. None of these transitions will be easy. I don't envy the members of the new Council of Economic Advisers!"
http://www.businessweek.com/managing/content/oct2008/ca20081024_818187.htm

[TwilightGardener]

52. Interesting, thanks. Someone last week posted an article about how

Georgia is exporting chopsticks to China and Japan, because they are too deforested. I guess there's one industry we should capitalize on--still have trees, if we manage our forests properly. But that's just one little blip, in an otherwise discouraging picture.

[Tierra_y_Libertad]

50. The consumers are too broke to buy and can't borrow to buy. This is a surprise?

[TwilightGardener]

53. Maybe it's a surprise that people are finally, truly broke and can't/won't

use credit cards to replace last year's model of whatever with THIS year's model, etc. I mean, that IS unusual behavior for Americans--took four years of a brutal economy to finally make us stop buying shit. You can imagine the retailers scratching their heads, saying to themselves, "WHAT?? Kids are going to school with LAST YEAR'S clothes and backpacks? People are hanging on to appliances a little longer? WHAT IS THIS STRANGE NEW WORLD??"