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Monday, August 15, 2016

‘Black Friday’ retail sales decline versus ’08



November 30, 2009 by · Leave a Comment 

The U.S. propaganda-machine has been steadily ratcheting-up expectations for the 2009 holiday-shopping season. This is not surprising. As a consumer economy, the health of the retail sector is critical to the overall health of the U.S. economy, and the retail sector itself is totally dependent on the Christmas shopping season.

Clearly the U.S. government cannot pretend the U.S. (consumer) economy is “growing” if, in fact, retail sales are declining. Officially, the preliminary reading for “Black Friday” sales (the day after U.S. Thanksgiving) showed a tiny 0.5% increase. However, that figure is not adjusted for inflation.

John Williams, of Shadowstats.com has pointed out that while official inflation showed the largest decline (i.e. deflation) since 1950, that if the same methods of measurement were used today as in 1950 that it “did not drop below 5%, at worst, in the current cycle”. Thus, while Americans might have spent a tiny bit more money this year, they purchased less goods.

With profit margins for U.S. retailers severely squeezed due to a Wal-Mart-led “price war”, selling less goods for less profit obviously means a worse holiday shopping season than last year – which was already billed as “the worst in 40 years”.

 

This “surprising” weakness in the U.S. retail sector cannot be over-emphasized. Last year, holiday shoppers were shell-shocked by the combination of a stock market crash, an economic collapse, the disintegration of the U.S. housing market, and the most-rapid rate of job losses in more than 70 years.

 

All of those factors are now supposedly behind U.S. shoppers, with the economy supposedly growing, the stock market pumped-up to recover most of the 2008 losses, and job losses have supposedly slowed to a modest rate – yet they still bought less.

The fact that all these supposed improvements in the U.S. economy have had zero positive impact on the U.S. retail sector illustrates two points which I have made on several occasions. First of all, it confirms my previous assertions that the U.S. economy is not growing (see “The U.S. Economy is NOT Growing”), there has been little improvement in U.S. unemployment (see “Wall Street Invents New Jobs Propaganda”), and the U.S. housing market is not even close to a “bottom” (“Housing Sector Mirage”).

More specifically, it confirms my previous analysis of the U.S. retail sector (see “Death of the U.S. Consumer”). This is not “rocket science”, nor even complex economics. It’s all just simple arithmetic. With falling employment income, dramatically reduced wealth, and no access to additional credit, it’s obvious that U.S. consumers can’t spend more.

This is why I keep pointing out how totally irrelevant U.S. “consumer confidence” reports have become. It doesn’t matter how “confident” consumers are if they have no money and no credit. Indeed, the U.S. economy would be in much better shape if it had a population full of gloomy-but-rich consumers, rather than the “confident” but broke consumers which must (try to) support this sector.

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