It’s a pandemic, so there are problems with the data.
By Wolf Richter for WOLF STREET.
Total retail sales in May bounced off 17.7% from the April low, according to the Census Bureau today. April had been the lowest April since 2013. May retail sales, at $485 billion seasonally adjusted, were down 6.1% from May 2019, down 3.3% from May 2018, and up 2.6% from May 2017. It seems, people are spending their stimulus checks and their extra $600 a week in federal unemployment compensation.
Ecommerce sales skyrocketed 30% year-over-year to another record. Sales at building materials, garden supply, and equipment stores jumped to a new record. Other segments bounced off strongly, but remained at low levels. Two segments that had spiked in March – grocery and general merchandise stores – fell halfway back to earth in April, and stayed there in May. Department stores and clothing & accessory stores, though they too bounced, remained at horribly depressed levels that, other than April, were multi-decade lows. There is no good news for malls. We’ll get into each of those segments:
The pandemic impacts data collection, leading to large sampling errors and huge revisions.
The Census Bureau acknowledged, as it had done in April, that due to the pandemic, it changed its data collection procedures. This data is based on surveys sent to 5,500 randomly selected retail and food services locations, of the over three million such locations in the US. Normally, data are collected “on paper, online, fax, and through telephone interviews.” But due to the pandemic, it was collected “primarily via email requests and online reporting, supplemented by calling operations.” In addition, the Census Bureau said it altered the method of seasonal adjustments.
The same issues dogged the surveys in April. And so, as part of its data release today, the Census Bureau revised its April data. Revisions are normal. But some of the revisions for April were huge, up and down. The list below shows the percentage differences between the April dollar sales levels of the “advance estimate” released a month ago, and the revised data:
- Food services and drinking places: revised down -7.5%;
- Sporting goods stores revised up +7.7%;
- Clothing and accessory stores revised up +18.9%;
- General merchandise stores revised up +10.5%,
- Furniture stores revised up + 23%.
- Overall retail sales revised up +2.1%.
A month from now, we might also see these types of mindbogglingly large revisions of today’s retail sales for May.
The segments that spiked to new records
Sales at non-store retailers continued to spike from record to record. This category overlaps partially with ecommerce but also includes other types of retailers such as catalogue and mail-order operations, door-to-door sales, sales at temporary stalls and at vending machines. Fired up by the relentless boom in ecommerce, sales jumped 9% in May from April, and by 31% from May last year, to $86 billion:
Sales at building materials, garden supply and equipment stores (such as hardware stores and big-box stores like Home Depot) spiked 16.4% in May from April, and by 10.9% year-over-year, to $36 billion, a new record — which makes sense: people stuck at home with time and money, including stimulus money, fixing up their homes and building sheds in their backyards:
The other extreme: where sales remain abysmal.
Sales at department stores – not counting the online sales of department stores – had totally collapsed in March and April. In May they bounced but remained 26% below May last year. Department store sales have been declining since their peak in 2001. Countless chains have filed for bankruptcy over the years. Most were liquidated. Over the past two months, Neiman Marcus and JCPenney joined the bankruptcy club. Lord & Taylor is planning to. Year after year, surviving department stores have announced waves of store closings.
They were structurally being obviated. From the peak in 2001 through February 2020, monthly sales collapsed from $20 billion to $11 billion, despite inflation and population growth. In April sales collapsed to $6 billion. In May, sales bounced to $8.5 billion – a previously unimaginably low level, and still down 26% from the already depressed levels in May last year:
Last week, Macy’s CEO Jeff Gennette said that sales at stores that had been reopened for at least one week were about half of where they’d been before the pandemic. And before the pandemic, Macy’s – which invested massively into its booming ecommerce business – had been closing stores for years because their sales were already evaporating.
Sales at clothing & accessory stores, after stagnating for years, plunged to near-zero in April. In May, there was a bounce, but off near-zero, and sales, at $8.1 billion, remained abysmally low, being down 63% year-over-year:
Sales at Restaurants & Bars bounced off the catastrophically low levels of April, as many restaurants have reopened, but sales remained down 39% year-over-year:
March spikers return to earth.
Sales at grocery stores and beverage stores – which had spiked in March, driven by panic buying and a shift in consumption from restaurants, offices, and hotels to households – gave up a big part of that spike in April and remained roughly at that level in May. Year-over-year, sales are still up 14.5%, a huge gain for the grocery and beverage business, which is otherwise noted for slow growth based on population growth and price increases:
Sales at general merchandise stores without department stores had spiked in March and then gave up that spike in April. In May, sales ticked up 2% from April and were up 6.1% from a year ago. Walmart and Costco are in this segment. But April sales were revised up by 11.7% in this data set (see above list). So hard to tell what’s really going on:
This makes sense…
Sales at sporting goods, hobby, book and music stores, which had collapsed by 45% over March and April, bounced right back in May, plus some. At $6.9 billion, sales were up 4.9% from May last year. There have been numerous anecdotal reports on the booming business at bike shops and about people, locked out from their gyms, buying stuff to exercise at home or outside. And it all makes sense – but the dollar amounts are small:
But this is where my sampling-error alarm went off.
Sales at motor vehicle & parts dealers – which includes sales of new and used vehicles plus parts sales – bounced off sharply and made up almost all of the lost territory, down only 3.9% year-over-year. And this is the biggie, the single largest retail segment, with $98 billion in sales in May, accounting for about 20% of total retail sales. But this is where my sampling-error alarm went off….
The automotive industry, including Cox Automotive, estimated that new-vehicle sales in May dropped 16% year-over-year (units not dollars) and that used-vehicle sales dropped 20%. These industry data collectors have broad data available that are submitted by dealers and automakers and tend to be fairly accurate.
So the 16% and 20% year-over-year declines in unit sales conflict sharply with the 3.9% year-over-year decline in dollar sales estimated by the Census Bureau (which includes parts sales, but they are less than 8% of the segment’s total). And with what I heard from my dealer friends, that 3.9% year-over-year decline simply doesn’t go down well.
Sales at furniture and home furnishing stores bounced back sharply in May to $7.7 billion, but remained at very depressed levels and 21.5% below May last year. This is the category whose April sales were revised up by 23.3%, which is a huge revision (see list at the top). So we take all this with a grain of salt:
Sales at gas stations – which includes the other stuff people buy at gas stations – also ticked up too, but remained down 31% year-over-year. Gasoline sales in dollars are heavily influenced by the retail price of gasoline, which had collapsed in prior months and is now on the rise again:
The winners in this crisis: Ecommerce – for retailers that don’t sell men’s office attire and formal wear – and for sure, lawyers. Read… An Epically Bad Week for US Brick-and-Mortar Retailers and Landlords
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I had to go to the Home Depot near my house this morning at 7:30. Their parking lot was almost completely full which is something I have never seen before.
This part of the data is definitely correct.
I thought people were out of work and needed to save money,????
They are at home doing what smart people do- fixing stuff while they have the time. Especially stuff that is important structurally (roofs) and will only get worse later. The question becomes once everyone works through their essential list of stuff, then what?
The list never ends.
I do the same anecdotal survey, but you must also take a look at what people are buying. I bought a gallon of liquid hand soap/sanitizer. Consumers are buying items based on availability, while trying to make fewer stops.
Accepting everything at face value & understanding the lockdown has distorted spending as well as data collection, my reaction is I’m frankly surprised how fast things appear to be rebounding (remember: tens of millions are still out of work, some permanently).
Over the next 3-6 months we’ll start to see the magnitude of the systemic shift to e-commerce.
I’m a geezer (73 with a mechanical heart valve), but the nation needs to get serious about segregating by age. Until effective therapeutics & vaccines are readily available, those under 65 can probably pretty much live life as normal, but geezers will have to be very cautious with social distancing.
The residual of this ridiculous lockdown political crap may have saved a few lives, but not as many as if elderly in assisted living had been protected properly.
I also believe the is no such thing as “science” in an event like this; the virus acted too fast (not to mention data was hidden/destroyed by China). The only really useful advice was “was your hands, don’t touch your face and social distance; “science may catch up in a year or so, but that’ll be too late.
Industrial production does not agree with your premise
Bobby
Article was about retail sales, not industrial production. I had no “industrial production” premise.
If industrial is the same as manufacturing, the U.S. has a whopping 10.6 manufacturing jobs out about 134 million people working. Job numbers are at 2000 levels. Twenty lost years for families and 26 tril in debt. Go stock market.
Science was not listened to by various leaders. However, it existed and if the advice of scientists early in the pandemic, e.g., to use masks, avoid enclosed spaces with unknown people like airplanes and public transportation, and avoid all gatherings, had been listened to this pandemic would have been much smaller.
Now, even the survivors have been severely hurt and not just with permanent damage to their bodies. Some coronavirus survivors are getting bills of over a million dollars.
Imagine what will happen if a significant percentage of Americans slowly get infected in these new spikes that are projected to last until October, because we are valuing the economy first. What will be the costs if say 2% of the population incurs bills of a million, even if the true costs are only $100,000 per person.
As to the elderly, we would have needed masks and protective equipment to have protected them properly and those masks were actually discouraged initially. Even now, there has been no use of the defence production act to compel massive production of N95 masks, so healthcare workers have had to buy cheap, Chinese KN95 masks, which often are made by ignorant crooks and do not work, and those healthcare workers often get sick or die as a result.
We should have had enough N95 masks even for ordinary Americans in February, as the Chinese did. Of course, the communists bought them up from many foreign countries once they knew of the virus.
M
Surprisingly, I have a different opinion on a couple of your points:
1) I contend other than hand washing & social distancing, there was (and mostly still is) little or no real “science” for Covid-19. The behavior of all of the following is scientifically unclear:
o Wearing of masks (to this day, advice varies)
o Animal-to-human transfer was originally ruled out; still unclear which species (especially domesticated ones) transfer virus to humans
o Originally, virus was defined as having low probability of contagion, that obviously was incorrect
o Ability of non-symptomatic carriers to infect others
o C-19 incubation period
o C-19 contagion period
o Effect of sunlight on attenuating virus
o Effect of UV (specifically UV-C) on attenuating virus
o Protocols & benefits of hydroxychloroquine
o Protocols & benefits of other mentioned drugs (statins, Coumadin, beta-blockers, et al)
o Collateral damage from virus (lungs, blood vessels, hearing, stroke, heart attacks, et al)
o Does having antibodies (ie: having had C-19) provide immunity? If so, for how long?
o There still is no agreed-upon mortality rate from contracting the disease
Lots of smart people have many conflicting opinions & best guesses on the above, but ABSOLUTELY NONE OF IT IS SETTLED SCIENCE.
2) National Defense Act has indeed been invoked to manufacture N95 masks (link: https://www.massdevice.com/u-s-defense-department-using-defense-production-act-to-boost-n95-masks-supply/)
3) The clear intent of the government is to absorb all C-19 treatment costs. Roll-out has been bumpy because of unclear legal language defining boundaries of commitment. Congress didn’t initially define start & stop coverage dates; congress didn’t define how to demonstrate illness was in fact C-19 (especially in early days of testing). Considering the billions being spent/absorbed, by both government & insurers, those parties have more than demonstrated good faith & continue to resolve financial issues. It isn’t easy effectively spending billions of dollars to assist unknown numbers of people, especially when congress starts off with a ridiculous 2,000 page bill.
Well written. I couldn’t agree more.
There is some science but much of the “science” that the press and the political left talked about was based on incorrect notions of the mortality rate of the disease, which is much lower than suggested initially for people under 70.
“remember: tens of millions are still out of work, some permanently”
These tens of millions are currently receiving free money and many of them were allowed to defer payment of debts.
Correct.
This is an outstanding article – and it applies the world over:
The Real Economic Catastrophe Hasn’t Hit Yet. Just Wait For August.
After a terrifying spring spent in lockdown and a summer of protests in the streets, things are going to get a lot worse in the fall.
More than 40 million people lost their jobs in the last few months, in the fastest and deepest economic slowdown ever recorded. More than half of all households with low incomes in the United States have experienced a loss of earnings, as have a quarter of all adults. The numbers are grim — but as bad as things look today, they’re on track to get much, much worse.
The US economy right now is like a jumbo jet that’s in a steady glide after both its engines flamed out. In about six weeks, it will likely crash into the side of a mountain.
https://www.buzzfeednews.com/article/tomgara/economy-recession-coronavirus
Obviously the subsidies cannot stop ‘in the fall’ or else the jumbo jet will crash into the ground
Six weeks? Try “starting in two weeks,”
June 30th last day under 500 employee firms keep need to keep employees on payroll to convert PPP loans into a grant.
July 15th, tax payments for 2019 are due after being postponed in April.
July 31st $600 a week federal payments that add to state unemployment end.
Eviction bans start ending now.
September 30th, last day over 500 employee firms must keep employees on payroll to convert PPP loans into a grant.
Oct 1st Grace period on federal student loans ends.
A massive debt strike by Americans of ALL payments, to public and private entities, is the ONLY thing that will force the Federal Reserve to create more money for people.
The equivalent of ~$22,000 for every man, woman and child, was given to bail out the financial industry. Americans need to strike to get that in the second money creation.
@Tony22
We don’t need more bailouts or debtor strikes – we need fiscal responsibility and acuity. People who can’t afford a few weeks or few months interruption in income should be carrying very little debt. If they have lots of outstanding debt and zero savings, they should suffer the consequence even if it means losing their car/home/tanking their credit. In the process, the lenders also should suffer the loss of repayment so maybe they won’t lend so haphazardly in the future. This whole “well it’s only $X a month!” life people are living these days (not taking into account the full cost, *only* the $X a month aspect) really needs to end. Separating needs from wants, delaying gratification, and not falling for the tricks lenders and sales people use like “oh, we can approve you!” and “it’s only $X a month!” even though their debt load would be approaching 40-50% or better of gross pay would go a long way towards restoring some stability in the financial system. Will it be brutal? Most likely. Will it last a long time to clear out decades of overindulgence? Most likely. Will the people who endure a very painful lesson improve their habits? Perhaps. Hopefully. Some certainly will. Building debt upon debt upon debt for generations eventually brings down the house. Propping up the system / can kicking just makes the future inevitable collapse larger and more painful.
By definition, data is backwards looking. So, but fortunately you can somewhat prognosticate based on human nature. Thanks to our media, we’ve had a healthy dose of fear put into us.
The protests are doing something else, I’m honestly not sure what, it seems to be driving anger that is exacerbated by the economic situation. Unlike the previous protests, this one may not stop because the protestors largely will have nothing to do anyway.
A lot of this will depend on when and if the party comes to a crashing halt at the end of July when government largess stops. The people will demand more money, but that’s just accelerating the bad to worse. Realistically, we’re better off taking the medicine now rather than later. In terms of damage, 1918 has got nothing on 2020.
I was reading the New Orleans news online yesterday, the courts are now open and the evictions have started, 63 were filed the first day which is 3X more than normal on any day. Unemployment benefits top out there at $247 a week. There were 17 shootings since the end of last week, high even for them. It will get even worse when the extra govt assistance ends.
Well, the court filings are probably just backlog. I would assume that the shootings could be considered the same if there has been a corresponding set of peace and quiet earlier. It’ll probably end up trending back to the old normal.
Looks like some evictions and foreclosures are extended until late August
https://www.cnn.com/2020/06/17/success/fha-eviction-and-foreclosure-moratorium-extended/index.html
The residual of this ridiculous lockdown political crap may have saved a few lives,
Well, I disagree. This is not “the flu”. One does not want to have this crap rampaging through a wide section of the population on the odd bet that maybe it won’t be so bad, and maybe it won’t mutate into something worse with all the incubators for it.
“We” could have done this in “The Asian Way” also, with masks, checks, and isolation of victims – that I totally agree with. For some reason(s!) “we” very much didn’t want to be like “them”(?), thus leaving lockdowns (which many states, like the UK, screwed royally up also) as the other containment possibility.
The more one learns about Covid-19, the less one likes what one hears:
Where do we see many cells with many nuclei? Cancer, f.ex. The horror scenario is that one gets this mildly, recover, some years down the line those mutilated cells turns cancerous and then one has A Problem. The fewer infected, the better!
I also believe the is no such thing as “science” in an event like this; the virus acted too fast …
Totally agree. Just look at Sweden. And this is where “the political crap” is needed: A process to make reasonable decisions fast, based on crap data and gut feelings, THAT is the politicians job!
A crisis doesn’t go well when people elect clowns, chancers, and morons out of disrespect for “the trade”, and these gets argumentative instead of acting because they never figured to stop campaigning after they won and govern, but, in a way people asked for this and they got it good and hard too.
Exactly what i tell people when they say we have to listen to the experts. There are only experts in theories, not in hands-on experience (thankfully).
OK, they have some advantage over the non informed, but it is trial and error for now.
Some of the experts actually have on-the-field experiences against pandemics and similar viruses. But of course, there are also lot of noise and “bad” science/scientists.
Also many experts warn about the worst case scenarios and THAT is what they are expected to be doing as expert scientists. So just because the worst case didn’t materialize doesn’t mean they were wrong.
Being 76 I can well relate to your fears. However, there is information out there that will greatly reduce them, that, sadly, is not being widely reported.
Javert Chip, generally I agree with. There are alot of people that have the same thinking.
The problem is that the damage has been done. So many people are so full of fear now. I see people going to the gym and working out wearing masks! You are doing more damage to yourself by doing this. If you are afraid, stay home and workout at home without a mask. Don’t do dumb.
I guess when you are terrorised and afraid you may not make sensible decisions. :-(
BTW: I guess those sales numbers will continue to be revised until we get some stability. That stability may take some time to come back. Shopping isn’t enjoyable at some places, who wants to wait in lines, and get your temperature taken? Just to buy more stuff.
Many of the people who work in US retirement facilities receive few or no employee benefits, low pay and are limited in the hours they are allowed to work, probably to disqualify them from company subsidized health insurance. At the large Baycrest retirement complex in Toronto (Baycrest.org), only 2 patients and zero staff members have died because of the virus since March. All the staff members have government sponsored health insurance and a range of employee benefits.
Sorry to tell you JC, but ya don’t get to claim real and true ”geezer status” until you manage to reach age 75!
Then and only then can ya claim it, and good luck to ya to get where I have been for a while ”enjoying” all the wonderful benefits of that age and status, including, all the younger folks,,, boomers, in fact, as I suppose you will want to claim next, bowing down, as they should, per Gilbert &Sullivan’s mandate,,, which, fortunately or otherwise, I cannot remember at the moment, but it had a lot of bowing down, as should be for WE the PEEDons who have somehow managed to reach 75.
With a lot of hopium, I can now tell you that, once reaching 75, your life expectancy goes UP!!! Look it up if you don’t believe it, as I did because I certainly did not (believe it.)
?
” science” only existing when it helps you like your heart value?!? Nots how reality works. Your delusions run deep brother.
After seeing the resurgence of retail sales this month, it appears that the fed is also going for broke with their own private buying.
Up here in Toronto, as more stores start opening back up, things are going back to normal fairly quickly.
As a result, Montreal, Toronto, and Brampton, remain Canada’s hot spots for Covid-19. The US/Canada border closure was just extended another month until July 21st.
Restaurants, sports, concerts, and air travel are not doing so well.
Mask wearing has fallen rapidly to maybe 15% now.
Life goes on.
In BC we have had single digit covid infections for several weeks now, and very few deaths. When a case does appear full contact tracing is achieved within a few hours of diagnosis. This is in a Province of 5 million people, the physical size of several western states. On Vancouver Island…pop just under 1 million, the lockdowns have been total on large gatherings, bars, and nightclubs. Construction has continued unabated, manufacturing, logging, milling etc. We have no active covid cases on the Island. How is this possible? People are limiting their travels, practice social distancing, and many wear masks.
Today I popped into the liquor store. The drill: shut off truck, release seat belt, grab wallet, and don mask. Our public health officer runs the show, politicians are keeping quiet, and people for the most part follow suggestions. The directive is to always wear a mask if social distancing is not possible, and wash hands…lots. Limit all contacts. Our health officer has said that if the virus returns we will go back into firmer restrictions. No one wants that so we follow the rules.
My friend runs the local post office. They are swamped with e-commerce. Swamped. Canada Post is doing an excellent job. Yesterday, my daughter mailed me a package from down island. I received it today, less than 24 hours from posting and we are rural. Excellent service. Retail is still happening and doing okay, but much of it is online. In fact, almost all our own family buying is now online, excluding food and liquor.
If people want the economy to improve, the virus has to be addressed first. Canadians are absolutely horrified to see what is happening in the States. Horrified. Granted, Ontario and Quebec have not done very well controlling their outbreak, but at least they are not in denial about it. Political rallies….really? Unbelievable.
Paulo, because of the “unbelievable” (believable) way the Wuhan virus is chaotically addressed throughout the U.S. It’s best for me, an elderly man with co-morbid conditions, to completely isolate myself, pending a vaccine.
It’s not so hard as it might have been without e commerce and modern communications and rereational media, DVD discs, etc.
Paulo and RD,
Not sure why anyone who has watched the demonstrations/riots would consider ”rallies” ”Unbelievable”??
USA is not like other nations or any other areas where either socialist and other fascists, or ”Lords and Ladies”,, or warlords of various persuasions have for centuries of all those kinds of guv mints (or lack thereof) used most of WE the PEEDONs as either slaves, ”serfs”, servants, or just plain cannon fodder…
Although in times like this, we suffer greatly (as clearly indicated by current data on this virus) from the very clear lack of both education and truth from guv mint and ”news” and even more from the propaganda from all sources, none the less, we suffer it without guv mint literally forcing us to our knees, etc., as has been documented by many local reporters on this side, especially MC01, or at least, not so far….
At least, that is the message current and prevalent,,,clearly, more to follow, and apparently soon
Not quite.
I read (possibly on this site) that nearly 45% of the Canadian workforce is receiving emergency aid of some sort (wage subsidies, mortgage holiday, interest only loan etc…)
Life goes on …. for now. It might feel close to normal.
But this is obviously not sustainable.
Over the past few days, the Federal Canadian Gov announced that it is looking at extending that money (CERB) past the original epiry date.
By the way Students are eligible to get money if they can’t find a summer job. Same goes for recent grads. You get a different amount depending if you are a recent grad versus a student that cant find a summer job.
The new normal is the new abnormal!
Here in New Zealand the govt has extended the program until September 1.
Essentially this is universal basic income and it cannot stop because so many businesses have collapsed or are in hibernation.
There simply are no jobs to be had.
If the wage and mortgage subsidies stop, we get a financial calamity that will make GFC look like a tea party.
Welcome to the perpetual Universal Basic Income/MMT reality… similar story across all OECD countries.
The only thing is… what cannot go on forever, will stop.
Sorry, that line ‘Under the age of 20 there were Zero deaths and 13 hospitalizations, i.e. deaths.”, should read ‘Under the age of 20 there were Zero deaths and 13 hospitalizations”.
It’s early days yet, it will take a while to really see how the pandemic will affect some sectors of the economy, while the trends are clear for others already.
At least half the restaurants in my small town of Sebastopol will go out of business because they simply can’t seat enough customers 6′ apart and they lack sufficient outside seating to make a go of it.
That will have knock on effects, restaurant spaces are expensive to repurpose and empty storefronts on your main street are not a cheerful sight.
Sebastopol is a nice little town. Love Hop Monk. Would like to retire there but prices are insane.
May is headed for downward revisions. I also am seeing less spending this month than last. Looks like it will be choppy. Reopenings happening earlier than expected helped.
North side of Houston, TX here and restaurants appear to be very busy as we are up to allowing 50% capacity. But from looking at the parking lots, there are more than 50% inside the establishments.
Home Depot, Lowes, ACE Hardware, garden supply stores are very busy. Costco, Sams, Walmart, other grocers, etc are full all the time. Gasoline is now $1.79.9/gal RUG. Diesel around $2.00.
The traffic is back! Grrrrr…
Where are the people wearing masks? I only see a few…..??
What pandemic?
Supply stores never did shutdown. Not where the data was massaged.
Sorry Murica got tired of CV19 and cancelled it just like a bad sitcom…didn’t you get the memo?
All these talk about 2nd wave…psssh..hard to have a 2nd wave when you’re still battling the 1st wave that you simply a trying to ignore. If the ignore tactic is good enough on my 3 yr old, it must work against CV19 as well.
The USA is going to implement the Swedish model by default.
Just remember, the Honey Badger virus doesn’t give a damn about your states timetable or you for that matter.
If this tracks like the Spanish flu did then we have another year to go.
Honey Badger virus from Peaked Prosperity?
Same here in central Indiana.
Most people in Denver are wearing masks. Restaurants and stores have been open more than a month and cases are still declining.
The people in this forum and elsewhere who suggest a second wave will exceed the first are extremely misinformed.
The disease is spread in close quarters with prolonged exposure more than in less crowded settings. Think cruise ships, large churches, sporting events, subway in NYC. Maybe school, but not much empirical evidence for that right now.
None of these things will return to the status quo ante this year. We have the capacity to test 500,000 people a day now. There is almost no domestic or international travel. Nursing homes will immediately lock down if there is a hint of a second wave, and in some states, like mine, more than half the deaths are in nursing homes.
How exactly can a second wave possibly be larger if most people are avoiding the most dangerous situations?
in kansas city mask wearing has gone from about 75% to 15% in the past few weeks. i was in a department store and all the sales people were wearing mask but only 5% of the customers wore a mask.
I also read covid cases in KC have been rising 5 days in a row after dropping for 5 or 6 straight weeks
Gee….just saw this official tweet when I looked up the TX infection rate.
Notice about today’s #COVID19TX update: https://txdshs.maps.arcgis.com/apps/opsdashboard/index.html#/ed483ecd702b4298ab01e8b9cafc8b83
The 93,206 total reported cases for 6/16 includes 2,622 new cases today and 1,476 previously diagnosed @TDCJ
inmates now reported for Anderson (887) and Brazoria (589) counties.
But no worries, mate. Gov Abbott says you have lots of hospital capacity.
“Texas Gov. Greg Abbott announced on Tuesday the state’s highest-ever number of new COVID-19 cases: 2,622.
He also reported a second record high: 2,518 people hospitalized with the virus in Texas, up from 2,326 a day earlier.
Despite the concerning uptick in people sick with the virus, Abbott said that the reason for his news conference was to let Texans know about the “abundant” hospital capacity for treating people with COVID-19. He and other officials spent much of the briefing touting the state’s hospital bed availability.
Disclosing the new record high number of hospitalizations related to COVID-19, Abbott emphasized that figure is “really a very small percentage of all the beds that are available.”
Lets Go Shopping!!! Then dinner.
40M unemployed. But receiving more money than if they were employed.
This is totally awesome – let the pandemic continue.
Wolf,
With regard to Home improvement/gardencenter/equipment sales, I’m most certainly sure the result that burst of commerce is a new-found love of vegetable growing, fruit tree orchards ( however small), & animal husbandry, in some form .. in light of the questions over problems with janky supplyline/chain disruptions + the related contagion issues among workers employed in food processing/serving ..
I see this tying in to less restaurant dining .. with a greater interest/need to dine-in ‘homestyle’, emphasized by many Americans exploration into greater self-reliance and sufficiency.
Hopefully such interest will become more then a passing fad, in a future of less Bernaysian convenience!
just my 2-sense ..
There’s certainly some of that going on. People were forced to stay home and discovered all kinds of neat stuff!
Some of us didn’t have to discover it – we had been living it, for years.
It reminds me of what an Acoma Pueblo Indian guide said to his entourage: “Your History books say ‘Columbus found America'”. No, he didn’t. It wasn’t lost; We knew where it was, all the time”.
the wonders of baking bread… all the bread machines were likely on back order for a while. Glad we bought ours a year plus ago, it is certainly seeing a workout.
All I can say is thank goodness for Costco and the larger bags of whole wheat flour that you can buy there.
There were lots of projects we always wanted to do, but never had time to do, because work leached all time and energy away.
“Working from home” means that 80% of the office bullshit, like those mandatory management meetings with 40 people all sucking the oxygen out of the room, are just GONE*, which means that suddenly one now has excess time and energy :)
People know that this is only a fleeting happiness, so they move while it is there!
*) Sure, they can try the format on Zoom, but, there one can switch the video off due to bandwidth problems and leave The Great Leadership to drone on and on in fresh air while we read a book or something.
Pent-up slack. No doubt with our stingy leave policies people could use the time off if not to catch up on home improvements than maybe just to take a breath. Every worker in the US would have accumulated almost an extra year off over this 10 year “recovery/expansion” with leave policies that are more normal in advanced economies.
With the G, it is always about the survey methodologies – exactly how the data gets collected/adjusted/projected.
Quite often, the survey titles can be quite a bit misleading based upon that fact (sorta reminds me of ETF/MF names in that regard…ya gotta always read the very, very fine print).
My guess on auto sales number?
The initial reporting is *always* a lot more WAG (wild *ss guess, based on low samples/adjustments/projections) than the G is comfortable openly acknowledging..subsequent months’ adjustments whittle down the volatility.
But with C19, missing/late data reporters probably just got ignored…skewing alleged sales way upward based on “projections” of the missing data.
I wonder, does the G provide the number of data reporters who report in each month?
(If not, then the situation strikes me as vaguely similar to stock mkt prices/market cap, without volume data – the missing data frequently tells a big story of its own)
(I’ve also often wondered if in the post 2000 world, the G simply ignored households that went to zero income, when calculating median income – simply defining zero income households as not being part of the universe to calculate medians)
The MMT advocates in Comgress will use this data to support UBI. Money printer will keep going Brrrrrrrrrr…….Bond speculators will be getting a good shot of the output of Money Printer going Brrrrrrrrrr………Personally I would like to see another round aimed at the bottom of the economic rung that got hurt immediately due to C19 instead of bond speculators on Wall Street.
What do you call the ratio of the minimum wage to the maximum wage? The Dick-Biscuit index?
So with stats looking bad like this for automotive, I am still trying to wrap my head around why Harley stock is shooting up like there’s tons of pend up demand waiting to happen in Q2. If people are not buying cars, they sure as hell aren’t buying overpriced hogs especially when there’s tons of used one flooding the market…oh wait, nevermind…I am still thinking as if fundamentals is a thing…my bad.
The automotive industry, including Cox Automotive, estimated that new-vehicle sales in May dropped 16% year-over-year (units not dollars) and that used-vehicle sales dropped 20%. These industry data collectors have broad data available that are submitted by dealers and automakers and tend to be fairly accurate.
So the 16% and 20% year-over-year declines in unit sales conflict sharply with the 3.9% year-over-year decline in dollar sales estimated by the Census Bureau (which includes parts sales, but they are less than 8% of the segment’s total). And with what I heard from my dealer friends, that 3.9% year-over-year decline simply doesn’t go down well.
I think there are two factors at play.
First is retail investors tend to buy easy-to-buy stocks from names they are familiar with, no matter how in bad shape these companies are. I doubt these folks are buying BMW or Honda stocks: the Japanese stock market is not as easy to access as the US one and not many retail investors know BMW sells well north of €1 billion worth of motorcycles and parts every year, far more than HD.
Second is folks are betting on a bailout for HD. The Milwaukee-based manufacturer was bailed out to the tune of 2.3 billion in 2008-9 through the Fed’s CPFF program. However how a bailout is supposed to help HD deal with a myriad of pratical issues which affect their image and sales we are not told.
HD has the same problem b/m retail has. Once the profit levels get so bad, no bailout will help.
How on earth has the coronavirus not killed off Sears?
Maybe it has some dignity and don’t go after the walking dead?
Because if you sell a tee shirt that is printed “I lost my a** sets on Sears stock”, someone must pay a licensing fee for the use of the name. No matter how broked they be, these names can never die as they have rights until the end of time…we can thank the folks at Pacific Playland (not their real name) for helping us with this. If you can’t kill mice, market them.
Retail sales have been recovering nicely. Paying people to stay home has hurt gasoline sales. Bar and restaurant sales are down. A woman and 15 friends were enjoying a night out at a Jacksonville bar without face masks. Soon they all tested positive for COVID-19. The CDC reported 486 new coronavirus deaths in the U.S. on June 16. There are an estimated 330,000,000 people living in the U.S.
Almost like ok we’ll totally disrupt our lives and do everything we can for three months while the government gets it together to pay us to stay home and then the government spent those three months just to get around to saying maybe you should all just die.
Covid19 couldn’t be more deadly for Sears than Steve Mnuchin.
Melbourne radio promo, keeping the distance will bring us together, must be smoking dried kangaroo poo, HOPPY DAZE are hear again !
On WV TV, the litany spoken without regard to the content of the preceding message, is: “Because we’re all in this together”
How can they base 5,500 locations out of the 3 million ++ businesses in America when Q1 and Q2 use tax sales were deferred? Soooo much data is lagging. This data seems really odd to me. It seems very lazy. You might as well put a check mark on the chart and say “everything will be okay” Who counted this data…the 2004 Florida ballot committee? :P
The red ink on these charts reminds me of blood spatter at a murder scene, especially the long drip at the end. But then I have been binge-watching “Forensic Files”.
Not a great job by census. The BLS was under political pressure to not give the real u rate, but put.It in anyways.
This was half assed stats with a low confidence number. My guess it’s downwardly revised, by 5%.
this short term rebound is not sustainable. The economy shows this in the big picture a blip in retail sales because people are not locked out of them does nothing to show the overall trend
I read an interesting blog the other day that with this new economic model of Modern Monetary Theory (MMT) currently in use why are we still paying taxes?
MMT is the future where the FED just prints and buys whatever the US Treasury issues or corporate America issues in bonds for that matter.
Nope. MMT is a partial nationalization of investment. It’s the greenback system.
This is fractional reserve banking with no off button for debt finance.
We tax things to limit their consumption – even MMT has no quibble with this.
Restaurants & Bars is back to 2003 levels? Really? At least the large city I live in had much more of this activity around 1997-2004 as the internet bubble of things still had a lasting effect with eCommerce etc. The stats are BS. I have traveled to other cities where hotels always have nice rooms available.
Just for fun there should be a Dog Happiness Index. That’s bullish!
Unless Unemployment comp. is extended, even at a lower payment, economy will drop. Probably will anyway but at a lower level. Now that we have state capitalism with Fed financing, those state businesses will still need some consumer sales.
State crony capitalism is called neo Fascism. No different from pseudo Socialist oligarchies like the USSR. The dreams of true Capitalism and Socialism go to die in the same mass grave.
Wolf, if I recall correctly from your previous articles, it is services not retail that drives the US economy. Where are we in knowing the status of the service industry?
In terms of dollar-based services data from the Census — this retail report is also dollar based — we need to wait till the quarterly data emerges. We just got the Q1 data :-]
The PMIs come out monthly, but they only say whether it was better or worse than in the prior month. They don’t reflect dollar-quantities.
Regarding the PMI – over 50 is improvement and under 50 is degradation, right? And that’s relative performance vs the previous reading? Those reports always seem to generate some confusion on what their data shows.
Yes, in theory, PMIs ask if current month performance is better or worse than last month performance — multiple choice: higher, lower, or the same. So if the current month is at the same catastrophically low level as last month, the reading (the average of the panel) should be 50.
If the reading is 48, it means that the current month was even worse than last month. So “48” is not an improvement over “25,” just a slower deterioration from the prior month’s catastrophically low level.
There are now discussions that these executives are not answering the questions correctly…
when most of the “working” class of service workers are making 1000 a week unemployment now instead of 600 to 700 when working then the money has to go some place. Trust me it’s not saved. Dick’s sporting goods was packed the other day with people buying everything!
Um, https://fred.stlouisfed.org/series/PSAVERT
A lot of people have gone out and bought exercise equipment while the gyms were shut down. A friend of mine used his stimulus check to buy a bike, a treadmill and a set of weights and bench. While he spent more than the amount of the stimulus check he figures he’ll make it up in not paying gym fees. People doing this will have a big effect on the fitness industry.
Here in Texas my gym, 24 Hour Fitness, just reopened but with limited hours. For now I have no plans on going anytime soon and might end up doing what my friend has done.
Tangential Observation for Money Spending: Back in the early 1980’s you could work one year at Briggs & Stratton (made ~50K small engines per day in Wauwatosa WI; foundry -> machining-> assembly->packaging) that paid for 4 years of in-state UW education. Or you could work at Evinrude for similar pay. Or at Harley…get the picture? Now…finance it!
I find the charts to be on target, they reflect what we did with our stimulus money. We spent every cent of it, as I had promised to do, it went for tires, footwear, books, music, clothing & accessories, and a big portion to groceries. The biggest portion went to tires and food, the rest was a lot less.
I’m sending smoke signals up to the gods of tire rot, to spare your tires …
I had vehicle maintenance needing done and with reduced in-office working went ahead and got it done mid-March. Almost two months later I received the stimulus payment. It almost covered the vehicle maintenance costs expended two months prior. Still able to work for now though and since the drive to work costs me about 20k miles/year currently… vehicle maintenance is important since there’s no public transit available and living costs near the major city area is super inflated.
Good article and comments ?
My guess is 90 days from now the numbers are going to far less positive than you are being led to believe they are now. 180 days out is not going to be a “Happy Holiday”.
Agree. And the 3rd quarter earnings reports come out right before the presidential election. Should be interesting.
Retail sales up!!
Savings rate jumps to highest in 39 years!!!
Wait??????? How can it be possible. People are saving and yet retail sales is up.
Someone’s not getting paid somewhere. If people are taking advantage of mortgage forbearance, by definition, when the bill comes due, retail will crash again.
Retail is only a small-ish part of consumer spending. Much of consumer spending goes into rent, healthcare, insurance, utilities, cellphone services, cable TV, and other services.
You listed a number of things but those don’t seem optional as opposed to retail. Especially with the shelter at home directive, I can’t imagine anyone cutting off their cellphone and/or cable TV.
That’s why I said, they must be skipping some essential payment.
For now, the renter eviction prevention and mortgage forbearance programs likely freed up a huge chuck of cash for lots of people. Some are saving it, some are pissing it into the wind?
Yup, we are in a vortex of insanity.
Massive jobs lost
Hourly earnings up
Savings rate up
Retail up
Rent/mortgages in forbearance
Hotels empty
Stadiums empty
Restaurants mostly empty
Office buildings mostly empty
Transportation mostly empty
Tourism mostly no existent
Stock market up
Government debt way up
Fear of dying from other people up
Personal debt all time high
“Transportation mostly empty” – Or simply not there!
I live under one of the main climb-out routes for planes departing the LA basin for the East Coast and Europe. Before this all started, I would sit out on the back patio most afternoons and pull up Flightradar24 to see where they were headed. There was a virtual “river” of aircraft headed out of LA beginning about 3:30 and lasting 3 hours.
Now – NOTHING! The occasional FedEx plane and a few short-haul Southwest flights plus a FEW others.
Don’t know when this is going to show up in the stats, but it’s going to be a pretty big down-draft.
It’s actually depressing – I never felt any urge to travel to any of those places, but it was reassuring that I COULD do it if I wanted to!
It is possible for retail sales to be up along with savings.
In our case, gasoline purchases are now once per month, instead of weekly. We don’t go out to eat at all…. and don’t bother with carry out as it gets soggy/cold before we get it home. Net food costs dropped, although our grocery bills are higher. We are not buying impulse items. No random “shopping therapy” – 99% of what we buy (other than food) is online.
Online shopping goods: new bedding (sheets, etc.), firearm and ammunition, home goods that make our house nicer/more comfortable, project materials (landscape lighting fixtures), a new vacuum cleaner, and hard to find OTC products. But…. we’re done now. Nothing more to buy (unless something breaks). Despite the above, we have a third of our “stimulus money” still laying about. That is earmarked for our pending income tax payment.
Speaking of income tax, keep in mind that the IRS and many states deferred the due date for income taxes until July 15. Prudent people may have put money off to the side for that obligation – which would reflect as “savings”. Those with less self control, p*ed it down the sewer and retail will dry up when they return to consciousness.
I also wonder how much of the retail day trader phenomena is the result of boredom and the *free* stimulus money that some may have chosen to gamble away on Robinhood…..
People are cocooning, which brings about a new set of economic priorities. Now you park the jet skis, and the boat, and put in a backyard grill and trampoline. This is really great for the economy, you are buying stuff you weren’t interested in three months ago. Now we need to call off the virus and get people to start going out more. Forget the backyard and the garden, go to Disneyland. It all works when you buy stuff you don’t need. Any stats on storage facilities??
“Now we need to call off the virus and get people to start going out more.”
Good luck with that. I have seen the most carefree people I know become scared to death of going out. The older people with all the money are scared the most.
“The older people with all the money are scared the most.”
Wot ?!!!
It ain’t money – it’s threat to health. … and we ain’t “scared” – we’re just aware of our situation.
You a young whippersnapper? (-:
I’m 63 with type 2 so I’m staying home for now. Back in March I thought I had Covid-19 as I had some of the symptoms however an antibody test in May came back negative. That of course put a huge damper on any plans to go back out. The only reason I go out now is for food shopping while wearing a mask. The last time the wife and I ate out was back in February. We used to eat out twice a week or so.
As for spending I’m a retired “rail” with 40 years service so I get a nice RRB check every month. For now I’m saving lots of money sitting at home.
Self-Storage is a trailing indicator?