Thursday, November 15, 2007

Retail Sales

The numbers for retail sales were released yesterday, in line with (rather anemic) expectations. Such activity directly accounts for approx. 35% of GDP, and much more when all other effects are factored in. Let's take a look at a few charts.

First, the year-over-year change in real retail sales, i.e. adjusted for official CPI inflation. The blue line is the monthly data and the red tracks the six month moving average.


Data: St. Louis Fed

The downtrend is quite apparent, even when using the low, official CPI figures produced by the government. Furthermore, with the price of gasoline and other fuels spiking sharply in the past few years, the impact of fuel sales to the overall numbers is becoming increasingly important. The next chart shows sales at gasoline stations as a percentage of total retail sales. Unquestionably, energy is becoming a more important part of the family budget.

On the other hand, food and beverage expenses at the supermarket have eased off very considerably over the years, as the next chart shows. Until very recently, real prices for food had been coming down for years and this allowed even less affluent consumers to spend more on other, non-essential items that carried higher profit margins (e.g. iPods, flat-screen TVs and Chinese imports). In addition, some food purchases were perhaps getting counted in other sectors of the retail "pie", i.e. as part of purchases at big discount stores that have added food sections (WalMart is an example). In any case, this trend appears to be bottoming out now; if recent food price increases stick, people will have less money to spend on the non-essentials.


The combination of gasoline and food purchases (i.e. adding the last two charts together) is shown in the next chart. After bottoming out during 2002-04, expenses for essentials is now on the rise once again.

How likely is this trend to continue on the upside? In my opinion, the chances are very high; food and fuel price pressures at the retail level are becoming apparent everywhere, China and Europe included. They are not caused by one-time events like droughts or pests, but by more fundamental supply/demand factors and questionable monetary policies in both the US and China.

The negative effects for corporate profitability in the services and non-essential goods sectors (i.e. just about the entire US economy) are going to be very significant and likely won't go away in one or two quarters.

9 comments:

Anonymous said...

So, you have inflation in food and fuel and deflation(?) in services and non-essential goods? How does this work out overall for the US? inflation or deflation? (or stagflation?)


Peter.

Richard Dawson said...

Survey said..... Stagflation!

Ding! Ding! Ding!

Anonymous said...

Anyway to tack in an estimate of consumer debt service along with gas and food costs?!

THAT might be even more interesting...

energyecon

Hellasious said...

Re: Debt service

The Federal reserve estimates household debt service as a percentage of disposable income. Data can be found at:

http://www.federalreserve.gov/
releases/housedebt/default.htm

Regards.

Anonymous said...

telefon tarife karşılaştırma
en uygun tarife
en iyi tarife
havalandırma
gizli kamera
izolasyon
çelik baca
paslanmaz çelik baca
doğalgaz bacası
Sohbet
iso 9001
iso 14001
Yangın Söndürme
yangın söndürme cihazları
yangın dolapları
yangın tüpü
izalasyon
ısıtma soğutma
isitma sogutma
Aspirator
Aspiratör
Vantilatör
sohbetim
turizm işletme belgesi
turizm belgesi
turizm yatırım belgesi
Chat
sohbet odası
sohbet sitesi
türkiye sohbet
tr sohbet
tüm türkiye sohbet
arkadaş sohbet
türkiye sohpet
kızlarla sohbet
kızlarla sohpet
muhabbet
muhappet
kızlarla çet
çet
Gizli Kamera
türkiye çet
çet sohpet
mırç
mirç
türkiye mirc
mirc
muhabbet
Sohbet Sitesi
Chat
Sohpet
Yangın
yangın güvenlik
yangın söndürme sistemleri
yangın tüpü dolum
yangın merdiveni
yangın çıkış kapısı 
Hava Soğutma
Hücreli Aspiratörler
Fanlar
Radyal Körükler
Toz Toplama
Soğutma Kulesi
Klima Santraller
Malzeme Nakil Vantilatörleri
iso 14001
iso 14001
iso 22000
iso 22000
haccp belgesi
haccp belgesi
ikamet tezkeresi
yabancı çalışma izni
yabancı personel çalışma izni
yabancı çalışma izni
yabancı personel çalışma izni
ohsas 18001
ohsas 18001
iso belgesi
iso 9001 belgesi
ohsas belgesi
ISO 9001
Teşvik Belgesi
Çocuk Bezi
Hasta Bezi
Makyaj Malzemeleri
Makyaj Temizleme Mendili
Kişisel Bakım
kolonyalı mendil
Islak mendil
Dudak Koruyucu
Temizlik Ürünleri
Göz Kalemi
Diyet Ürünleri
Süper Site
driver
Güvenlik Kamerası
Islak Mendil
Kolonyalı Mendil
Kolonyalı Mendil
JoyTurk
driver ara
web tasarım
Güvenlik Kamerası
paketleme
Kamera
Kamera Kurulum
Tatil
Tatil Köyleri
Turk tourizm
Turkish tourizm
Turk holiday
Turkish holiday
Turkish travels
Turk Travels
Tatil Yerleri
Tatil Beldeleri
Perde
Perde Modelleri
Kamera
Epilasyon
Emlak
Yaşam
Tatil
Video
Cilt Bakımı
video
süper
perde
jaluzi perde
stor perde
dikey perde
perde modelleri
perde
jaluzi perde
stor perde
dikey perde
perde modelleri
magazin
haberler
spor haberleri
video
eğitim
Giyim

qweaq said...

1.
Welcome to enter (wow gold) and (wow power leveling) trading site, (wow gold) are cheap, (wow power leveling) credibility Very good! Quickly into the next single! Key words directly to the website click on transactions!

2.
Welcome to enter (wow gold) and (wow power leveling) trading site, (wow gold) are cheap, (wow power leveling) credibility Very good! Quickly into the next single! Key words directly to the website click on transactions!

3.
Welcome to enter (wow gold) and (wow power leveling) trading site, (Rolex) are cheap, (World of Warcraft gold) credibility Very good! Quickly into the next single! Key words directly to the website click on transactions!

Anonymous said...

We review the bestonline poker bonus
online poker rooms
online poker guide
poker room reviews
poker sites
and so on.
We offer the highest quality flowers melbourne from around Australia at excellent prices
onlinecasino.com - online casino reviews
with best online casino,
usa online casino, strategy, news!

Anonymous said...

Shanghai Fashionorganic makes
Bamboo Clothing,Bamboo fabric ,
Hemp clothing,Organic Cotton,
Organic cotton clothing,Hemp Sandal
Soybean clothingVinyl Bag
Vinyl Packaging
laser engraver which is also the perfect choice for stamp making.cnc router
Super file encryption,folder encryption,A powerful and easy-to-use program for encrypting and protecting your data

wow gold said...

If wow goldfocal point of wow gold our new buy wow goldOpen RvR buy wow goldInfluence system cheap wow gold is mortal combat cheap wow goldbetween players of wow power levelingenemy realms. wow power levelingIn order power leveling to ensure that power leveling Keeps, and Fortresses. wow gold buy wow gold cheap wow gold