{"id":490,"date":"2010-09-14T09:53:00","date_gmt":"2010-09-14T13:53:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=490"},"modified":"2018-08-17T14:18:34","modified_gmt":"2018-08-17T18:18:34","slug":"buy-baby-buy","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/09\/14\/buy-baby-buy\/","title":{"rendered":"Buy baby, buy"},"content":{"rendered":"

August retail sales were up in the United States by 0.4%.\u00a0 This figure compares to a July retail sales figure of up 0.3%.\u00a0 Excluding automobiles and parts, retail sales rose 0.6% last month.\u00a0 If you were to exclude the same category, car-stuff, in July, retail sales were up a paltry 0.1%.\u00a0 Consumers mostly purchased clothing, gasoline and groceries; in other words, essentials.<\/span><\/p>\n

Analysis:<\/strong> There are several good and noteworthy things about today’s U.S. Commerce Department data:<\/span><\/p>\n

1.\u00a0 Retail sales were up for the second month in a row.\u00a0 Additionally, if you strip out the\u00a0category made volatile by the “cash for clunkers” program, that is autos, then sales were up 0.5% over the previous month.\u00a0 This helps to allay my fears that consumers were about to hunker down.<\/span><\/p>\n

2.\u00a0 August’s 0.6% up vs. July’s up of 0.1% represents an acceleration in spending.\u00a0\u00a0Perhaps a\u00a0sign of building momentum.<\/span><\/p>\n

3.\u00a0 Retail sales being up by an adjusted 0.5% is a strong result given that personal incomes have unfortunately not been growing by a similar magnitude.\u00a0 What that means is that folks are likely to have bought more than they earned last month.\u00a0 Normally I wouldn’t consider this to be a good thing.\u00a0 However, it is indicative of two important things.\u00a0 One,\u00a0for consumers to spend more than they earn requires some confidence on their part.\u00a0 Two, for consumers to spend more than they earn requires that either credit or savings is available.<\/span><\/p>\n

The U.S. consumer has really impressed me over the past two years because they have proven that they can exist in a state of a balanced budget.\u00a0 That is, they have\u00a0mostly spent only what they have earned.\u00a0 For the long term health of the U.S. economy to be assured this was important.\u00a0 The previous 15 years saw U.S. consumers spending lots more than they earned.\u00a0 This wasn’t sustainable.\u00a0 August’s retail purchases likely exceeded personal income growth, but only by a very small percentage.\u00a0 The health of the economy requires that people every once in awhile take a chance.\u00a0 So I consider this to be a positive result.\u00a0 Does that make sense?<\/span><\/p>\n

Mitigating factor to popping a champagne cork:<\/span><\/p>\n

Consumers bought staples mostly and even then they had to be induced tremendously to buy those staples.\u00a0 Those incentives took the form of back-to-school sales and tax-free promotions in more than twelve states.<\/span><\/p>\n

Importance grade:<\/strong> 8; while retail sales is a very important number, remember that 2 data points (July and August) do not demonstrate a trend, only a line.\u00a0 I would love to see how September sales perform before declaring a return to confidence on the part of the consumer.<\/span><\/p>\n

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

August retail sales were up in the United States by 0.4%.\u00a0 This figure compares to a July retail sales figure of up 0.3%.\u00a0 Excluding automobiles and parts, retail sales rose 0.6% last month.\u00a0 If you were to exclude the same category, car-stuff, in July, retail sales were up a paltry 0.1%.\u00a0 Consumers mostly purchased clothing, […]<\/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-490","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/490","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=490"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/490\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}