• 703 days Will The ECB Continue To Hike Rates?
  • 703 days Forbes: Aramco Remains Largest Company In The Middle East
  • 705 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,105 days Could Crypto Overtake Traditional Investment?
  • 1,109 days Americans Still Quitting Jobs At Record Pace
  • 1,111 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,114 days Is The Dollar Too Strong?
  • 1,115 days Big Tech Disappoints Investors on Earnings Calls
  • 1,116 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,117 days China Is Quietly Trying To Distance Itself From Russia
  • 1,118 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,122 days Crypto Investors Won Big In 2021
  • 1,122 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,123 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,125 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,125 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,129 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,129 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,130 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,132 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Retail Sales

When you read this and hear it on the financial news networks: http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=nwham&guid=%7BFB2FB849%2D93E0%2D4DED%2DAB8A%2D43812DBA8A43%7D it's hard to believe retail sales have really only been growing at only a 3% annual pace in recent years, and for the past seven weeks they have gone nowhere. But it's very true.

This is a classic case of how selectively taking data out of its true historical context in a hyper-bullish environment can be so unbelievable misleading when you check it out.

The chart below, from Dismal.com, includes the past seven years of retail sales data - in billions of dollars - with a visually obvious high-low channel reflecting the past four years.

Guess what the peak-to-peak and trough-to-trough growth rate is for that four-year channel? Yep, 3.0% per year - not the 6%, etc. crap touted by the financial media today.

The distorted stats that are reported by the media, and touted by the perma bulls, come from the misleading fact that they are measuring from last year's low to this year's high. Of course, such a 12-month growth rate is useful, especially since it usually is good seasonally adjusted metric, but you've got to look at all of the time series data if you don't want to be fooled by those with an agenda. And as you can now see - in this case - the popular 12-month rate-of-change is very deceiving.

But the true state of affairs gets worse.

Notice that although the data for the latest reported week ending 9/27/03 reflects a pickup in retail sales activity, because it is only a partially retracement of the previous three-week sharp decline, sales are the same as they were seven weeks ago - see circle.

Did the financial media report these obviously more important facts? Of course not. No one was in the "right" mood to do so.

Keep in mind that these upper and lower channel trendlines are only growing @ 3% per year.

As we reported to our investment advisor clients last month, we fully expect retail sales to decline to at least the lower channel trendline over the intermediate (months) to long term (quarters).

And this will presage the consumer-spending-led second-dip recession that we expect will be readily apparent next year.

Back to homepage

Leave a comment

Leave a comment