January Retail Sales Report: Strong Growth in Building and Home Improvement Sales…

The Commerce Department has released a much anticipated January Retail Sales Report which shows total cumulative spending growth of .02% over prior month, and 2.3% growth year-over-year.  Importantly, a sector review (year over year), comparing January ’19 with Jan ’18, highlights where we are against our anticipated state of the economy:

(source – pdf)

Gas prices are low which are reflected in lower overall sales data (-4.2% year-on-year) within the gasoline station sector.  Additionally, electronic and appliance store sales (-3.3%) reflects American consumers holding on to currently owned durable goods in that sector and not replacing. Both of these sectors were defined within the larger MAGAnomic forecast.

On the strong upside, building materials and home improvement reflect large growth of +8.7% year-over-year and +3.3% over prior month.  Again, when considering how the principles of MAGAnomic policy focuses on ‘blue-collar’ economic improvement, these outcomes are exactly what you would expect to see.

How do these results reflect amid your family and social circle; do you see the same?

The Auto sector took a major drop in January with a decrease of 2.4% over December 2018, and a moderate +.02 percent when compared year-over-year to January 2018.  The auto sales sector looks tenuous, not many people buying new cars. Again, are these results in alignment with your family and friends?

The sectors that most benefit from disposable income, sales at restaurants and bars advanced 0.7 percent for the month and 5.7% for the year-over-year.  Also, purchases at hobby, musical instrument and book stores jumping 4.8 percent for the month, the largest increase since January 2013.  Sales at food and beverage stores gained 3.2 percent year over year, the biggest gain since April 2016.

It would appear consumers are being selective with making large durable goods; extending the life-cycle of the most expensive purchases, including electronics; but also enjoying the benefits of higher wages with expenditures by dining out and enjoying entertainment.

Knowing MAGAnomic policy is focused on the middle-class, these retail sales outcomes would seem to make sense.

Does this overall big picture align with purchases and lifestyle choices amid your family, friends, co-workers and social network?

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30 Responses to January Retail Sales Report: Strong Growth in Building and Home Improvement Sales…

  1. I’m sure this will be covered extensively by ABC, CBS, NBC, CNN…….ah never mind.
    Thanks for analyzing the report SD. TCTH is probably the only place we will get to see it

    Liked by 6 people

  2. Extended Family is spending more on home improvement and local entertainment.

    Growing online share of purchases.

    Liked by 6 people

    • Tiffthis says:

      Same here!

      Liked by 2 people

    • wendy forward says:

      Us too-I alone probably account for the rise in book sales!

      We don’t want new cars because we are terrified of the computerization–Any eventual car purchases will be good “pre-owned” models that are not computers on wheels.

      We do need to eventually get a new dishwasher but rest of the appliances are fine.

      Liked by 4 people

  3. splat! says:

    Home improvements going on here, in addition to refurbishing hurricane damaged areas, a bathroom renovation (diy) is scheduled to be finished by friday. We’ve decided to put more money into structural improvements and forego updating electronics based on the good old-fashioned “need versus want” model.

    Liked by 8 people

  4. lakelurelife says:

    On the personal side, we finished our basement (2 bedrooms, 1 bath, living room, kitchen, home office).
    On the business side: I’m a real estate broker in a niche area (vacation/retirement town). My sales have climbed 20% since 2016 and show no signs of slowing down.
    My clients come from all over the country, especially Florida. Clients who are purchasing second homes for investment purposes. People are very excited about purchasing and then renting their mountain/lake homes.
    These rentals are bringing in around $30k a year in profits for the owners.
    Lots and lots of building going on as well. Two years ago, you could get a general contractor out to your house to rebuild a deck the day after you contacted him.
    Now…you’re going to have to wait 2 months. This goes for plumbers, electricians, and landscapers as well. Everyone is booked.

    Liked by 10 people

    • Janie M. says:

      Another upside to this lake, is those contractors may be hiring new workers so they are current on their projects.

      Liked by 3 people

      • lakelurelife says:

        The general contractors I’ve spoken with are having difficulty finding skilled employees.
        If I had a kid pre college age, I would encourage them to consider learning a trade in construction rather than college.

        Liked by 7 people

        • auntiefran413 says:

          That surely beats four years of college, graduating with a mountain of debt and not being able to find a job. (I have a grandson in that predicament.) Fortunately (or unfortunately, depending on how you look at it) his was a business degree; he was able to open an EBay store and earn more than he would have at an entry level job (so he says). His siblings have engineering degrees and are doing well.

          Liked by 1 person

    • thesavvyinvester says:

      “Two years ago, you could get a general contractor out to your house to rebuild a deck the day after you contacted him. Now…you’re going to have to wait 2 months. This goes for plumbers, electricians, and landscapers as well. Everyone is booked.”

      Lakelurelife…. The Bush-Obama real-estate downturn flushed out anyone in the home improvement industry that didn’t really have the chops or skills to be in the business. Those that are left know their stuff. I need a new roof, not asap, but I do need one and the only guy I trust is so booked I don’t dare even call him. With that said, I wonder if GDP is being throttled back because there isn’t the cadre of tradesmen to build stuff in this country although we are back-filling to make up the deficits.

      Liked by 1 person

  5. glissmeister says:

    Mostly appears that retail sales numbers are generally down. It may be these are storefront retail sales not adjusted for internet sales of products shipped to purchasers. Buying products on line to be delivered direct saves purchasers so much time it’s mostly worth the extra cost of delivery. Plus it’s a 24 hour per day 7 day per week opportunity to shop and purchase. Love it or hate it, Amazon is basically just a giant retail warehouse with a digital storefront. Like any other corporation, it’s got its strengths and weaknesses and fatal constraints.

    Liked by 1 person

  6. Tiffthis says:

    Our family moved to a slightly bigger home last month. I drive the same car I had in grad school, the hubby likes to lease cars but let’s me go with him to negotiate a good price. Kids college fund grew a lot in 2018-19 as well. 👍🏼 (They are 7 and 5 yrs old)☺️ That said we are mostly staying in/ eating in since the move- enjoying the new space.

    Liked by 8 people

  7. Tony D. says:

    As a cabinet manufacturer located in Illinois we are doing better than our local competitors. At our high end product line people are not afraid of 80k kitchen prices. Our dealer network is doing ok in New York and Michigan also. On a personal note I am doing more research into health alternative lifestyles and continue to spend as fas as I make it other than 401k contributions. I like what Trump has done in medical costs but hope he continues. It may be the only reason most fear retirement.

    Liked by 2 people

  8. Another Scott says:

    “Does this overall big picture align with purchases and lifestyle choices amid your family, friends, co-workers and social network?” Mortgage industry was down last year and looks down this year. Those of us working in that sector are nervous. There’s plenty of glass half empty economic data out there.

    Like

  9. truthseeker39525 says:

    Regarding the slight slowdown in the electronics category….. I wonder if this includes cell phones.
    The news stories I have been hearing for the last 6 months or so is that the new top-of-the-line phones are $1000 or so, and sales are slow, as may people are apparently thinking that their existing phones are good enough, and that the new ones do not provide enough improvement to justify the expense.

    Closer to home, we bought a new ‘lease-return’ car a year ago, but the older ones are all running great, even my wife’s Ford Windstar, the mileage champ at 403,000 and counting.
    Everything else on a pretty even keel, except expenses for the younger daughter’s wedding. (THAT helped the numbers, but it was over in Austin, TX.)

    Let’s all hope that the ‘Rats in the House are not successful in ‘monkeying things up’ too badly, even through they apparently want us to go back to the horse-drawn days, (But…. are they ready to SHOVEL the horse-apples off the roads?)

    Liked by 3 people

  10. angellestaria6674 says:

    In my orb, we’re pretty much holding in all areas of spending in the grain of the last couple of years. We’ve made saving a central thrust of our economics. If anything would go haywire, we could afford to live in our present life-style 3-4 years without credit, credit cards, what have you. A great majority of our friends and neighbors could not do that. I’m usually the guy who neighbors come to when they need a little help here or there. One word: choices.

    Personally, e.g. I have a pretty loaded up laptop that got damaged, past warranty, but had a geek squad replace the hard-drive with a new SS drive. Saved a lot of money and my laptop is better than when I got it. Stuff like that that enables us to squirrel money away for a rainy day.

    We’re not typical preppers that have a year or two of food stashed away, but we do live basically prepared knowing anything could go south anytime, but are enjoying some of the benefits of a recovering economy. Sensible financial planning is insurance.

    Liked by 3 people

  11. TheLastDemocrat says:

    It took four years for manufacturing jobs to drop precipitously.

    We are seeing shifts, but not the real shifts, yet.

    Like

  12. Joshua2415 says:

    Another factor to consider is that the areas that are slowing tend to be those driven by borrowing. We could be seeing the impact of rising interest rates and maxed out household debt.

    Liked by 3 people

  13. hellinahandbasket says:

    My youngest son (a self-made butcher/manager) and his new wife (food sales manager) both just 26 years old, just bought their 1st home – granted it was a $107k slight-fixer-upper in Tucson AZ, but a home all the same – their small rental apartment was 1k/month, they now pay $700/month for a home mortgage!
    My oldest son and his wife (both 30 yrs old) are expecting their 2nd child in June but aren’t financially ready to make the mortgage move yet, more timid to take the plunge because of their child growth at the moment – they also tend to purchase more “stuff” instead of socking-away cash, his job growth is strong and quickly moving-up in the sales management industry, and she’s still pursuing online education while raising the kids, so they’re late bloomers compared to the younger son.
    However, BOTH sons and their wives are blue collar workers who in the past 2 years developed very strong futures as they unwittingly gained more opportunity from the market around them, and even southern Arizona filled with a low-wage workforce, are able to make a strong financial future for themselves, honestly I was worried they would need to leave the state to be prosperous.
    The ONLY potential college education will come from the pregnant daughter-in-law taking online classes, heck my youngest didn’t even graduate high school and he’s the manager of a busy butcher shop at the local grocer’s.
    I guess what I’m showing is that the younger generation has so much opportunity right now, that even in a city that has stagnant wage growth, low job opportunity and more than enough low wage competition, willingness to work hard will take you into prosperity even without one of those lefty college degrees.

    As for me… I’m 20+ years federally employed, lots of job security, just doubled my retirement contribution, spouse is retired after 45 years in construction, but has NO retirement benefit other than $1000/monthly SS. We moved across the country to Arizona 15 years ago because we couldn’t afford to live in the northern suburb area of Boston MA anymore – the place where all our family prospered and lived until death… sucked us dry and almost destroyed us – so we moved 2800 miles away from it.
    Foolishly and without securing a good wage for BOTH of us, we were elated when the bank still thought we were worthy of a home – we were confident my husband’s 45 years as a tradesman would grow wealth in a housing-boom area like Arizona, and he’d have more work than we ever knew in Boston. But, that was not reality as we were forced to walk-away from a foreclosure 10 years ago after only owning for 5-years in AZ. The flood of low wage construction workers in AZ, quickly degraded my husband’s 45 years as a tradesman, to the same level as every other low skilled laborer out here in AZ – he could barely secure $15/hour.
    Since I’m only 3-5 years away from retirement, we will continue to rent. We really don’t feel financially secure for the future as the ability to contribute to retirement funds were only recently available, struggling our entire lives, working paycheck-to-paycheck back East. Because of past bad economics for construction and blue collar workers (especially in New England), our retirement is now unsecured in AZ, but our children’s futures and eventual retirement looks great with a Trump Presidency – heck, maybe we’ll just move in with them! #MAGA

    Like

  14. Robster says:

    Not to be cynical, but the big picture includes a downward revision of Dec retail sales to -1.6% (from -1.2), the largest drop since 2009. An uptick of 0.02% from there is tiny although government shutdown may be a factor. We’ll see what happens in Feb.

    Like

    • Mary M says:

      What is the comparison of Nov. to Dec’s uptic and what is that compared to prior years? Could be that the greater drop was due to a higher December’s numbers.

      Like

  15. auntiefran413 says:

    As a retiree (as are many Treepers, I’m sure) I chalk the good grocery store numbers to — dirty word — INFLATION! Who, in their right mind ever thought they’d see ground beef at $4+/lb. and chuck roast on sale, mind you, at $5/lb. Produce is just as bad…over $1 for a head of common iceberg lettuce.
    My daughter asked her butcher what happened to those cheap cuts of meat her mom (that would be me) used to buy feeding a family of seven…you know…things like short ribs, neck bones (great with sauerkraut), something called “plate beef” (I have no idea what that is/was) to make wonderful soup. His answer: “They aren’t cheap any more!”

    Like

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