You often hear me talk about how financial pundits and economic analysts are disconnected from Main Street. Today we get a prime example of that from the Wall Street Journal.
The topline of the WSJ article is essentially that people are not spending money on anything except essential goods (housing, energy, fuel, food, etc), which is somewhat of a ‘duh tell us something we don’t know‘ type article. However, the analytical part of the article is where you find the insufferable disconnect. Here’s one example:
[Data Point 1] “Gasoline prices dropped in September for the third month in a row, falling 4.9% from August.” [Data Point 2] Sales at gasoline stations, a proxy for spending by car owners, declined 1.4% last month.”
If gasoline dropped 4.9% in price, but sales only declined 1.4% that would indicate more physical gasoline was purchased at a lower price than the month before. It’s not a hard concept to understand.
This is a retail sales reality even identified in the article itself, “Unlike many government reports, retail sales aren’t adjusted for inflation, so some swings reflect price changes rather than shifts in the amounts purchased.”
However, now look at this: “Spending at restaurants and bars grew 0.5% in September from the prior month. But prices at restaurants grew 0.9% in the same month, according to a separate Labor Department report released Thursday, meaning that consumers are getting less for their spending.”
No, that’s not what this means.
If restaurant prices increase 0.9%, but restaurant sales only increase 0.5% it means you are selling/serving fewer customers. It doesn’t mean consumers getting less food, it means fewer consumers are eating at restaurants…. Which is caused by consumers having to prioritize their spending.
(WSJ) – […] Spending declined in categories linked to big purchases like cars, televisions, beds and golf clubs. Purchases at electronics and appliance stores declined 0.8% in September while spending at furniture stores fell 0.7%.
[…] Scott Brave, the head of economic analytics for Morning Consult, said consumers have started to pull back on optional purchases while still spending on the essentials. “They are having to make tough decisions,” he said. (more)
I only saw the part where He said he was going to battle with the Jews. I have business in LA, most of my friends and business associates are Jews. conservative btw. but I know what he’s talking about. Business is a contact sport for most of them, I trust the ones I work with, but business is business. I’ve been screwed over by more people than you can fit in a phone booth, but I learned my lessons. control the money, it gives you leverage when you might need it.
Dr…..I wanted to respond to a comment you made earlier regarding some of your posts getting held up. I did notice one in our pending earlier, and wanted you to know that you’re not on our moderation list. Perhaps a word(s) in the post made a false positive match with a word on someone’s email address that is in moderation….? Dunno….but it happens to everyone sooner or later.
I never thought much of Kanye, but you gotta give credit where credit is due, for him to speak out on some of the things he has takes a lot of courage. they managed to cow that rapper girl that’s real raunchy, nicky menage I think. One knock on the door and all the sudden her cousins vaxx induced limpness wasn’t such a big deal.
Full Video – 2022 Georgia Senate Debate: Hershel Walker vs. Raphael Warnock
https://commoncts.blogspot.com/2022/10/full-video-2022-georgia-senate-debate.html
Herschel Walker to Raphael Warnock: “He told me Black lives matters…
In Atlanta, Georgia there are more Black babies that are aborted than anything. So, if Black lives matter why are you not protecting those babies?”
“Walker slayed Warlock, details at 10:00, film at 11:00!”
Actually, link to the whole debate is on TGP.
To: st, WORDMAN and DUTCHMAN – People who read TCT know how to read and scroll through articles here. Please stop hijacking the comment thread.
https://theconservativetreehouse.com/blog/2022/09/19/guidelines-for-comments-5/
OT. Why is this here?
“If gasoline dropped 4.9% in price, but sales only declined 1.4% that would indicate more physical gasoline was purchased at a lower price than the month before. It’s not a hard concept to understand.”
“sales” So you are talking sales in terms of $$$ across the register of the gas station, not the number of purchases conducted by consumers. Correct?
Sales still reflect an inflated purchase price per gallon but given that the rate of inflation is still way above 4.9% the relative purchasing power of the consumer was still way less than any temporary but small decrease in the unit price of gasoline. The Saudi’s recent moves in the world’s oil supply have made the WSJ article as well as the whole discussion itself irrelevant.
I just moved to Silicon Valley a few months ago and have to say the fuel price fluctuations when compared with my close friends and relatives (TX,WV,VA) have swung opposite each time in this short time span. First they went up 80¢ while their’s were dropping and suddenly just dropped 40¢ since the OPEC+ announcement. It’s just wacko land here, but the weather is incredible and the fresh farmers markets are amazing…and if you don’t pay attention to costs you’d never know there were problems.
School has started and kids are being driven to school. These extra miles driven are helping to prop up the sales for gasoline.
Good point.
I see a lot of parents taking the car to the bus stops. Not the schools. Often wondered why they don’t drive to the school to pick their kids up! Sometimes I get caught in the school zone and have to wait for 20-30 buses to get out, plus they stop a half mile down the road and at least 3 or 4 let the kids out. The real bummer is the road crosses the same set of railroad tracks 3 times, and that railroad is a spur line. It gets old waiting for ten buses to stop look and listen. If we are lucky there are only 1 train a day and sometimes no trains. I have to remind myself not to drive during those hours of the day. BTW, they are protected by gates and flashing lights. A normal 10 minute drive can last 45 minutes. It gets frustrating when you get caught in that mess. It seems to be the worst at public schools.
One of the reasons I’m not buying things now is because I read the Conservative Treehouse! Sundance warned us 2 years ago this was coming. I became proactive! We purchased a new air conditioning system, and a washer and dryer. I wanted a freezer and an air fryer. I looked around the house and thought is there anything we really need, let’s get it now. We saved money for a “rainy day” and it was time. Paid cash for all of it. Thank you again, Sundance for all you do!
I’m still buying several units of anything I buy. Bought 3 gallons of bleach today for example. I’ll use it, sooner or later. But it’ll be more expensive later.
Otherwise I’m just hoarding cash waiting for the crash
Walmart bleach is more expensive than Dollar Tree even though DT is now less than a gallon.
But even Dollar Tree has raised their prices from everything $1.00 to everything $1.25. DT had to raise prices in order to stay in business.
Bleach, however, degrades over time. I wouldn’t buy more than could be used in six months or so. And be sure to rotate stock.
One solution I use is to have purchased a couple 15 gallon pails of solid calcium hypochlorite and then dissolve it as needed in filtered water. This is typically sold as chlorine tablets for pool sanitation.
What I mostly use it for is in aqueous solution to inject into my well water to facilitate preciptation of dissolved iron to be filtered by a calcite matrix. However, I’ve also found it useful as ‘bleach’, properly diluted, for other sanitation purposes. It also does a good job of getting my socks white, though thorough rinsing is advised. Else, I don’t use it domestically and I don’t drink the treated well water.
The oldest of the solid is now close to a decade and stored in air-tight pails it’s done really well. Can’t imagine what that stuff costs now.
Did you get a solar house generator? Gonna need one when they cut the electricity.
Better get that black plastic over your windows or the electricityless aroud you can see your lights on and be expected to act like beasts in swarms (herds? gangs?)
And they’ll be elbowed aside by the government types who will swarm in and take all that is not nailed down.
Yes, good advice; learned that decades ago having a big genset in the shop and being the only house with lights during widespread outages in the area. Easy to see that out in the country. Target. Particularly the diesel generator.
Now I use oil lamps and go dark. Sold all the generation equipment off over a decade ago. Simpler and less of a target.
Nice post!
I am Scottish so frugality is in my DNA.
That said Sundance and his prescient Posts have ensured I up my game.
Hard assets are significantly increasing in value with each passing month
I have a brother in the U.K. he and his 3 sons are all financially astute.
Their consensus opinion is look out…
Cheers!
Scots have money in their pockets that will never see the light of day. 🙂
Can you guess my lineage? Damn right AS!
Long live the Scots! I’m part Scot (the best part BTW)!
Good to hear Max. 🙂 Thank you for sharing. I am humbled.
Warmest best to you and yours,
SD
I’m still drinking the giant supply of my favorite coffee that I bought last year when it was cheaper.
It’s a local brand that hasn’t inflated too badly because the shipping cost is low, so I will be doing another major stock up on it as soon as I see it on sale.
I’m stocking up on peanut butter to get protein. Crickets? Heck NO!
Rice and beans gets you your protein too. I’m beginning to have a taste for almond butter. As a kid, I would take 5 PB&J sandwiches to school every day, it never got old for 6-10 years.
Well dah! What a surprise, people are devoting less of their money to discretionary spending and more to essentials as the cost of those essentials rise. I was in the wholesale import business for gift shop supplies when our Liberal (think Republican) government was ousted by the media promoting Mr Sheen, also known as Kevin Rudd, to be Prime Minister on the basis that he would be just like the existing government, that had eliminated all our national debt, had a surplus budget in place and had been putting money into a future fund for any upcoming world disasters, but he would be a kinder more inclusive version. As soon as he was installed I sold my business, bought a large acreage debt free and retired early because it was only a matter of weeks before he showed his true colors and discretionary spending began to drop for the first time in five years.
This is great news!!! The cliff is getting closer.
Take the small wins for what they are.
I was talking to my son and he was placing an order for a new quad-trac 550 hp tractor. Two years ago the invoice was $415,000. Today $925,000. The equipment is the same with little changes for ten years.
Sales at gas stations would also include the sales of food within the gas station.
Pelosi channels Norma Desmond…
Truth Be Told Podcast: “Deep State Pelosi’s Final Close Up?” October 15, 2022
https://rightwirereport.com/2022/10/15/truth-be-told-podcast-deep-state-pelosis-final-close-up-october-15-2022/
We recently spent a week having to order takeout from local restaurants due to work we were conducting on our house, and…OMG….that’s an experience we will not repeat anytime soon, even if it means we just have to boil some hotdogs. We discovered one of our favorite places closed during the “pandemic, unfortunately, a Greek restaurant. We ordered from different places every single day. The food was the worst, horrible, so bad that we gave it to the dogs. Still fuming about paying 80 bucks at Outback for what we ended up with. Not only did we get overcharged for meager portions, the food was just nasty, dry, chewy, greasy cardboard…yuck. And we ended up with digestive problems on top of everything else. Yeah, not doing that again.
We eat out as little as possible. Even when we are out for the day we pack food.
Seniors are being hammered by Obamanomics as Obama tries to destroy capitalism and blame it all on evil big business, Republicans and the Supreme Court. He and his worshipers are at WAR with the USA.
It is most definitely NOT too much money chasing too few goods. It’s too little money running away from too highly priced stuff.
In other news, water is wet…
Sundance, by now there is a new generation in places of influence that were schooled in the everyone gets a trophy generation. They have no clue how ignorant they are and with that wall full of trophies they are convinced they are right. These people are now at government agencies and the disconnect with reality is what we are seeing and we will see much more of it. Allow the freedom of speech to be crushed and the snare will be snapped.
Explaining the gasoline example:
If the price of gasoline went down but the amount of sales also went down, it means that consumers are driving less. People have cut back on unnecessary car travel.
My most used vehicle, the truck, has sat so long spiders have had babies underneath it. Never mind the other cars. I have to put gasoline stabilizer in them to preserve the fuel. The truck is old-school diesel so that stuff keeps for years. I throw some waste oil in it for good measure. Last time I bought fuel was nearly three months ago.
I’ve noticed everyone locally is driving less. Heck the logging truck across the road hasn’t moved in over a week and usually that thing fired up at 2-3am every morning like clockwork, for years, and was gone for 10-12 hours each day. Bad omen.
in addiction to the increase in food prices, has anyone else noticed that serving sizes have shrunk at restaurants & fast food as well?
That’s a two-step process I first noticed decades ago. First, they raise the price. Then next time they keep the price the same and make the portion smaller. Then the next time, they keep the portion the same and raise the price. Then the next time, they make the portion smaller AND raise the price. Lather, rinse, repeat.
In the old days, IDK maybe some small places are still like it, they adjusted portion sizes to save on printing new menus so often. I remember that back in the 70’s and 80’s during bad inflation. Back when a bottomless cup of coffee was two bits. The uproar when ‘bottomless’ ended could be heard around the world, heh.
Some of my democrat/senior “friends” were complaining the other day about the high cost of a hamburger, fries an a drink at McDonalds. I told them (they are clueless) that when McD has to pay entry level employees $17.00 to $19.00 an hour they should EXPECT the prices to go up.
Besides existing kiosks, and some back-end mechanization, I would expect to see fewer employees and more machines in fast food moving forward.
I was watching some videos of a D.C. vlogger a number of Treepers follow, Penguin 6, when he was living in Hong Kong a few years ago and often ate fast food like McD’s.
What I noticed was the food in reality looked more like the pictures, the prices were very reasonable, and there were masses of employees buzzing around like bees. I’d always considered Hong Kong an expensive place to live but perhaps that was wrong. I wonder what they paid their employees.
You mean like dog food used come in 20 lb. bags, but now come in 14 lb bags? Price is the same, just less of the product.
Was at Walmart today and they had 43 inch Vizio TVs on Roll Back sale at $243.00. Almost bought one. Then I realized, that I still had to do the grocery shopping and thought better of it.
Interesting world, I remember back during the moon shot years when we bought a new ‘color’ television for 300 bucks, I think that was nearly half my dad’s monthly pay at the time, grocery shopping for the family was under 20 bucks a week typically.
Now, one can buy a TV for less than the typical weekly groceries for a family. What a world.