{"id":397,"date":"2010-04-14T09:47:00","date_gmt":"2010-04-14T13:47:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=397"},"modified":"2018-08-20T15:39:49","modified_gmt":"2018-08-20T19:39:49","slug":"economic-stabilization-affirmed","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/04\/14\/economic-stabilization-affirmed\/","title":{"rendered":"Economic stabilization affirmed"},"content":{"rendered":"

Good morning everyone!<\/span><\/p>\n

Today saw the publishing of the March retail sales data.\u00a0 The Commerce Department reported this morning that consumers increased their spending on retail goods and services by 1.6%.\u00a0 This is the largest gain since the Christmas season and the figure exceeded economist estimates for an increaes of 1.3% up.<\/span><\/p>\n

Separately, U.S. consumer prices were up 0.1% in March.<\/span><\/p>\n

Analysis:<\/strong>\u00a0As I have said since the “auto sales” figures were published last month, the U.S. consumer seems to finally be emerging from its fog.\u00a0 See, for example my post last week entitled, “quiet before the storm?”\u00a0 Not surprisingly a big portion of the rise in retail sales was driven by automobile purchases.\u00a0 However, other retailers, like clothiers, were also up.\u00a0 There are any number of reasons that U.S. consumers are feeling better about the world.\u00a0 First, is that the job market has stabilized, albeit it has not really improved that much.\u00a0 Second, it is spring time and folks start feeling better about themselves and the world in the spring.\u00a0 Third, the danged healthcare debate is finally off of the airwaves.\u00a0 Fourth, consumers have adjusted to the changes brought on by the recession.\u00a0 As we all know, people don’t like change.\u00a0 In the face of big economic changes folks usually hunker down.<\/span><\/p>\n

That consumer prices were up only 0.1% means that inflation remains tepid.\u00a0 However, I would like to point out that the inflation gauges in the U.S. are flawed because they do not include asset price levels.\u00a0 All throughout the dot.com and real-estate bubbles inflation remained tame.\u00a0 Meanwhile, asset prices went up and up and up and then they crashed.\u00a0 Hopefully the Federal Reserve starts to reign in the U.S. money supply by raising interest rates, lest we push the\u00a0problems of\u00a0this most recent asset bubble bursting into the future yet again as we did in the dot.com era.<\/span><\/p>\n

Importance grade:<\/strong> 9; that the U.S. consumer is buying again is critically important to the health of the economy going forward.\u00a0 Consumer spending is 65-70% of Gross Domestic Product.\u00a0 Thus, consumer well-being and spending is necessary for economic stability, health, and growth.<\/span><\/p>\n

[Note: it is very interesting to me that businesses did not start hiring to help end this recession.\u00a0 Instead, motivated to maintain solvency and profits, they seem instead to have waited for the U.S. consumer to start spending.\u00a0 This is instructive for future recession evaluation.\u00a0 What it means is that storms must pass, consumer mourning must occur, and then consumer’s must forget what has just happened for a recession to end.\u00a0 In other words, in the next recession it might behoove a president to ease the pain of consumers, rather than focus on businesses, as a form of helping economic stimulation.]<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning everyone! Today saw the publishing of the March retail sales data.\u00a0 The Commerce Department reported this morning that consumers increased their spending on retail goods and services by 1.6%.\u00a0 This is the largest gain since the Christmas season and the figure exceeded economist estimates for an increaes of 1.3% up. Separately, U.S. consumer […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-397","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/397","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=397"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/397\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=397"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=397"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=397"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}