The Quiet Revolution In American Shopping

One America News posted an article today about the changing habits of shoppers in America.

The article reports:

U.S. shoppers made more purchases online on Black Friday than in the mall – hurting traffic and sales at brick-and-mortar stores, according to data that offered a glimpse into what is still one of the busiest shopping days of the year.

For the first time in several years, however, store traffic on Thanksgiving evening grew – indicating a shift in when consumers are leaving their homes to shop. It is also a sign of how Thursday evening store openings have continued to hurt what has traditionally been a day that kicked off the U.S. holiday season.

The importance on the shopping calendar of Black Friday, or the day after the U.S. Thanksgiving Day holiday, has waned in recent years. This is due to the choice by many retailers to open their stores on Thursday evening, as well as to early holiday promotions and year-round discounts. However, it is increasingly turning into a day when shoppers do not necessarily flock to stores but spend heavily online.

Also, for most retail chains, Black Friday store traffic and sales data is not necessarily grim as consumers continue to spend, consultants said. Winning the transaction, whether online or in-store, has now become more important for retailers than where it occurs.

Most major stores have followed the example of Amazon, making things available online (with options of in-store pick up). Shoppers can now find an item online, place an order, have it delivered, or go to their local store to pick it up immediately or within a day or two.

The article concludes:

Shopper traffic on Thanksgiving evening increased by 2.3%year-over-year but was dragged down by Black Friday, which fell 6.2% from a year ago.

Brian Field, senior director of global retail consulting for ShopperTrak, said the traditional pattern of shoppers visiting stores has been disrupted not only by online shopping but by offerings like “buy online and pick up in store,” a growing category, which is not included in store traffic count on Black Friday.

“What all of this really boils down to is the customer journey has changed, now it can start anywhere online, in-store and end anywhere … and it is about making sure the customer makes the purchase and stays loyal to the brands more than where it happens,” he said.

Preliminary data from analytics firm RetailNext showed net sales at brick-and-mortar stores on Black Friday fell 1.6%, which the firm said is slower than in previous years. No data was yet available for actual spending in stores.

The National Retail Federation had forecast U.S. holiday retail sales over the two months in 2019 will increase between 3.8% and 4.2% from a year ago, for a total of $727.9 billion to $730.7 billion. That compares with an average annual increase of 3.7% over the past five years.

Consumer spending is a major part of the health of the American economy. The increase in holiday retail sales is part of what keeps our economy growing and thriving.

It’s Hard To Remove A Sitting President When The Economy Is Good

It is hard to remove a sitting President when the economy is good. That rule applies to attempts to impeach the President, and the rule also applies to elections. One impact of a strong economy is that people who are making good money and feel relatively secure in their jobs are less likely to engage in class warfare. Class warfare is one of the Democrat’s most frequently used weapons.

Yesterday One America News posted an article about the current state of the American economy.

The article reports:

The latest macroeconomic data is suggesting the chances of a U.S. recession have reduced in recent weeks due to steady consumer spending. According to a recent poll by Morning Consult, consumer confidence has rebounded over the past four weeks due to ongoing job creation, gains in wages and a soft price inflation.

Even without a resolution of the trade negotiations with China, consumers are feeling confident.

The article concludes:

Retail sales have also increased going into the holiday shopping season, beating previous expectations. Consumer spending makes up for roughly 70 percent of America’s GDP growth. Many experts have tied the ongoing stable expansion to President Trump’s economic policies.

I think on the whole, this economy has been remarkable. It’s taken the headwinds of the trade wars pretty successfully…and we’re still chugging along at roughly two percent. I think that’s an accomplishment.” – Douglas Holtz-Eakin, President of the American Action Forum

A separate report from S&P Global found the probability of a U.S. recession in the coming year has dropped from 35 to 30 percent since August of this year.

I personally would like to see the probability of a U.S. recession at 0 percent, but I don’t know if I would trust the media to report that number even if it occurred.

The State Of The Economy

The Conservative Treehouse posted an article today about the revision of the third quarter economic growth numbers.

The article reports:

More signs the U.S. economy is very strong show up today as several key economic indicators defy prior economist predictions.   Staring with a significant upward revision by the Bureau of Economic Analysis for the third quarter GDP growth from 1.9% to 2.1%:

The revision to GDP reflected upward revisions to inventory investment, business investment, and consumer spending.

The increase in consumer spending reflected increases in both goods (notably recreational goods and vehicles as well as food and beverages) and in services (led by housing and utilities as well as food services). (link)

Additionally, the commerce department released data showing U.S. core capital goods orders increased 1.2% in November, the largest gain since January; and more data on home sales shows a whopping 31.6% increase year-over-year. 

U.S. consumers and home buyers are benefiting from low inflation and significant blue collar wage gains that are an outcome of a growing economy and a very strong jobs market.  The most significant wage growth is in non-supervisory positions.   The economic strength is broad-based and the U.S. middle-class is confident.

We live in a commerce based society. When Americans feel confident about their financial futures and buy things, the economy grows. When Americans stop buying things, the economy shrinks. The economy is cyclical and interdependent. When people are insecure about their financial futures, they take fewer vacations, they go out to dinner less frequently, they go to the movies less frequently, etc. Then the jobs in those economic sectors begin to go away–fewer employees are needed. We saw that in the recession of 1990, which was essentially caused by a tax on luxury goods that Congress told us would affect only the people buying those luxury goods. Well, when people stopped buying luxury goods because they didn’t want to pay the taxes on them, the people making those goods lost their jobs. When those people lost their jobs, they traveled less, ate out less, shopped less, etc. Then the people in those industries were laid off because they were not needed. The pattern here is obvious.

When people feel secure about their future, the economy grows. Recent rumors of recession were not taken seriously because Americans were getting raises and could see that more of their neighbors were working. The economy right now is on a good path. It will take some serious effort to mess it up.

Why I Believe The Media’s Talk Of Recession Is Garbage

Breitbart posted an article today about September’s jobs numbers. There is a lot of good news in the report.

The article reports:

Economists had expected the economy to between 150,000 and 180,000 with the median consensus at 163,000, according to Econoday. Unemployment was expected to remain unchanged. Last month’s jobs figure was originally reported at 164,000, now revised down to 159,000, and unemployment was 3.7 percent.

Although the headline number was weaker than expected, wage growth was strong in August. Average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $28.11, or 0.4 percent, following 9-cent gains in both June and July. Over the past 12 months, average hourly earnings have increased by 3.2 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 11 cents to $23.59.

Unemployment among African Americans fell to 5.5 percent, the lowest level on record.

The labor force participation rate edged up to 63.2 percent in August, indicating that the strong labor market has continued to draw Americans into the workforce.

The largest job gains came from professional and business services, which added 37,000.  Census hiring boosted the federal government’s hiring to 28,000 workers. Health care added 24,000 to the total while financial services increased by 15,000.

The article concludes:

Consumer spending and the labor market have been strong. Data released Thursday showed worker compensation rising strongly and well-above inflation. Rising labor costs can promote capital investment by businesses seeking to make workers more productive.
With unemployment near 50-year lows, job growth has slowed and many businesses say they are having trouble hiring. Employment growth has averaged 158,000 per month thus far this year, compared with an average monthly gain of 223,000 in 2018.

This is the chart showing the Workforce Participation Rate since 2009 (from the Bureau of Labor Statistics website):

We are not yet up to 2009 levels, but we are moving in the right direction. The economic indicators are positive. Hopefully the American public will be able to see past the media’s efforts to create a recession.

The Latest Economic Numbers

On Friday, Market Watch reported that the U.S. economy did better than expected during the first three months of 2019.

The article reports:

Reports of the demise of the U.S. economy proved unfounded as first-quarter activity showed surprising strength. The U.S. economy expanded at a 3.2% annual pace in the first three months of 2019, the government said Friday.

The gain was well above forecasts. Economists polled by MarketWatch had forecast a 2.3% increase in gross domestic product. The economy grew at a 2.2% rate in the final three months of 2018.

Inflation moderated a bit in the first quarter.

The article includes other good economic news:

Final sales to domestic purchasers, which excludes trade and inventory behavior, rose 2.3% in the first quarter, the smallest gain in three years, but still well above what economists were expecting.

The value of inventories increased to $128.4 billion from $96.8 billion, adding to GDP.

The trade sector added a little more than 1% to growth in the first quarter. Exports rose 3.7%, while imports dropped by the same amount, leading to a smaller trade deficit.

Offsetting these gains, consumer spending decelerated to a 1.2% gain, the slowest increase in a year.

Business fixed investment decelerated to a relatively slow 2.7% gain, down from a 5.4% gain in the prior quarter. Investment in structures fell 0.8%, the third straight decline.

Investment in new housing was another weak spot. Residential investment dropped 2.8%, the fifth straight quarterly decline.

I believe that the weakness in the housing market is being caused by a number of things. The millennials, the generation that would currently be entering the housing market, are weighed down by student debt. There is also a different attitude among young Americans about owning a house that there was a few generations ago. In the past, many Americans looked at their home as an investment–something that would grow in value over the years. Many older people began with a ‘starter house’–a small house that allowed them to enter into the housing market. Today, couples are having children later than previous generations. Their first house is paid for by two incomes, and they are not dealing with the expense of having children. The concept of a ‘starter house’ is no longer with us. Those facts, along with the price of the home most young people want to own are working to slow down the housing market. I am not convinced any of those factors are going to change.

Time For A Change Of Economic Policy

This is a chart from today’s Wall Street Journal:

The article reports:

Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department‘s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.4%, and matches the average pace of declines during the recession.

GDP was recession-like in the first quarter, although most other data clearly signal that the decline is an outlier,” said Jim O’ Sullivan, economist at High Frequency Economics.

In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated. Consumer spending growth was lowered to 1% from 3.1% previously, largely because health-care spending was weaker than previously estimated.

President Obama has been in office since 2009. His economic policies have been in place for more than five years. It is becoming obvious that those policies have not been effective in reviving the American economy. It is time to send people to Washington who have new ideas that will encourage small business growth and turn the American economy around.

The Economic Recovery In One Graph

Today’s Wall Street Journal posted a story about the latest Gross Domestic Product numbers. The article included the following graph:

The Wall Street Journal reported that the Gross Domestic Product grew at a seasonally adjusted annual rate of 0.1% in the first quarter of 2014.

The article in the Wall Street Journal explains some of the factors responsible for the low economic growth. Some suggested causes were the extremely cold winter which slowed consumer spending, and the sudden drop in exports, declining at a 7.6% pace in the first quarter.

Obviously, this is not the robust economy the President has been claiming.

Enhanced by Zemanta

At Some Point, Even Low-Information Voters Will Laugh At These Reports

Ed Morrissey at Hot Air posted an article today about recent economic growth in America. The Bureau of Economic Analysis claimed a moderate economic annualized growth rate of 3.2% last month. The Bureau has now adjusted its numbers, saying that the economy only grew at the stagnation level of 2.4%:

The article reports the following from the Bureau of Economic Analysis:

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated.

Reuters reports the following:

Consumer spending was cut to a 2.6 percent rate, still the fastest pace since the first quarter of 2012. It had previously been reported to have grown at a 3.3 percent pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, contributed 1.73 percentage points to GDP growth, down from the previously reported 2.26 percentage points.

As a result, final domestic demand was lowered two-tenths of a percentage point to a 1.2 percent rate. The loss of momentum appears to have spilled over into in the first quarter of 2014, with an unusually cold winter weighing on retail sales, home building and sales, hiring and industrial production.

The article at Hot Air concludes:

Weather will be a factor in 2014 Q1, but it wasn’t in 2013 Q4. The economy was stagnating well before the polar vortices arrived, and has been ever since the June 2009 technical recovery. This is just more of the same.

President Obama’s economic policies are not working. Can we please try something else?

 

Enhanced by Zemanta