Friday, December 11, 2009

Rising Gas Prices Ignite Euphoria

ONLY IN AMERICA could a 9.7% increase in the cost of a gallon of gasoline create euphoria in the financial news media. Absent gasoline sales, November's retail sales figure would be CUT IN HALF.

From the U.S. Department of Commerce:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $352.1 billion, an increase of 1.3 percent (±0.5%) from the previous month and 1.9 percent (±0.5%) above November 2008. Total sales for the September through November 2009 period were down 2.1 percent (±0.3%) from the same period a year ago. The September to October 2009 percent change was revised from +1.4 percent (±0.5%) to +1.1 percent (±0.2%).

Retail trade sales were up 1.4 percent (±0.5%) from October 2009 and 2.2 percent (±0.5%) above last year. Building material and garden equipment and supplies dealers were down 9.3 percent (±1.8%) from November 2008, but gasoline stations sales were up 8.9% (±1.3%) from last year.

Using data from the U.S. Census Bureau news release linked above, and data from I have deciphered that ONE HALF of the "unexpected rise" in November Retail Sales is directly attributable to a 9.7% increase in the cost of gasoline from October 1, 2009 to November 1, 2009.

If you subtract the increase in gasoline station sales from October '09 to November '09 from the total retail sales number for the month of November '09, retail sales for the month of November '09 ONLY grew 0.7% month to month as opposed to the headline number of +1.3% reported widely today by the financial news media.


Economic reports raise hopes for global recovery
WASHINGTON (AP) -- Just in time for Christmas, the fragile economic recovery is showing signs of strengthening: Consumers are spending, companies are rebuilding stockpiles and Chinese exports are mounting a comeback.

Data released Friday eased some worries about Americans' willingness to spend this holiday season. But stores remain worried that they may have to offer deeper discounts than planned, perhaps as early as this weekend, because of mediocre sales so far.

That's because the only thing consumers spent a great deal more on last month was gasoline. I fail to see how spending more on gasoline shows Americans are eager to spend this holiday season.

Shoppers crowded malls for deep discounts over Thanksgiving weekend, but many consumers have been slow to return. Some analysts say the industry could suffer its second straight year of holiday-season sales declines.

The two weeks since Thanksgiving have been especially tepid. According to ShopperTrak, a research firm that tracks sales and traffic, sales slipped 0.3 percent for the week that ended Dec. 5 compared with the year-ago period. And they plummeted 18 percent compared with the previous week.

Officials at ShopperTrak estimated Friday that business did not improve much this week.

Oh..., I guess that Americans are not so eager to spend after all. Unless of course you count spending on gasoline. They spent 6% more on that in November than they did in October.

Also sparking optimism was a report Friday that U.S. businesses unexpectedly increased their inventories in October, halting a slide of 13 consecutive declines. The small gain raised hopes that businesses will restock their depleted shelves, boost factory production and help bolster the recovery.

Correct me if I'm wrong, but don't U.S. businesses increase their inventories ANNUALLY in October in expectation of "increased sales activity" in advance of Christmas? 50% of American retail's annual profits come from sales between Thanksgiving and Christmas...or so it is hoped.

China's trade figures for November were the best in a year, with exports falling just 1.2 percent from the same month of 2008. Retail sales, factory output and investment also saw robust growth last month.

Asian markets rallied as investors were heartened by the signs of rising global demand that could lift other economies in the region as consumers in the U.S. and elsewhere begin spending more after months of holding back.

"...the best in a year, with exports falling just 1.2 percent from the same month of 2008." Since when is falling exports good news? I guess when they fell less than the month before, LOL! I bet somewhere in the financial media this statistic is being reported as "growth" in Chinese exports.

World markets climb as China's exports improve
The Associated Press - Louise Watt - ‎13 hours ago‎
LONDON — European markets followed Asian stocks higher Friday as a big improvement in China's exports pointed to rising global demand that could lift other ...

That didn't take google long to find. Are financial news headlines meant to deceive? China's exports dropped 13.8% in October, yet we are led to believe they improved. "...a big improvement..." They DROPPED 13.8%!!!


Retail sales, at best, are bouncing along the bottom, and going nowhere fast. Government statistics are reported by the financial news media as purposely misleading in an effort to stoke confidence and encourage the hopes of a floundering nation.

Nowhere in the AP story above from Yahoo Finance was there mention that Total sales for the September through November 2009 period were down 2.1 percent (±0.3%) from the same period a year ago. Nor was there any mention that Octobers retail sales numbers were revised down 0.3% fro +1.4% down to +1.1%. Of course not, why rain on a retail sales parade?

And lost in today's financial news media frenzy over these magnificent retail sales figures for the month of November is the fact that the price of gasoline rose 9.7% just in the month of October alone. Who said there is no inflation?

I bet you never knew rising gas prices could be so exciting...

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