The first happened on Thursday, with the release of the Consumer Price Index figures for January, and the correlated real wages report. CPI was relatively normal, with an increase of 0.1% overall and 0.2% in core CPI for January, and a 2.5% increase over the last 12 months.
That meant that real wages had a small increase in January, which was a nice rebound from a similar decline in December.
Real average hourly earnings for all employees increased 0.1 percent from December to January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings combined with an increase of 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U).But that 2.5% year-over-year increase has eaten into most of any gains that workers have received in the last 12 months, particularly in last half of 2019 and start of 2020.
Real average weekly earnings increased 0.1 percent over the month due to the change in real average hourly earnings combined with no change in the average workweek.
From January 2019 to January 2020, real average hourly earnings increased 0.7 percent, seasonally adjusted. The change in real average hourly earnings combined with a 0.6 percent decrease in the average workweek resulted in a 0.1 percent increase in real average weekly earnings over this period.
0.1% a week! Don't spend that all in one place, everybody! Not exactly the sign of an economy where workers are getting their share of the alleged boom.
And that stagnating wage growth is starting to be reflected in mediocre growth in consumer spending. That was reiterated with Friday's retail sales report, which showed that both December and January didn't have a sizable jump in Holiday shopping.
Advance estimates of U.S. retail and food services sales for January 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $529.8 billion, an increase of 0.3 percent (±0.4 percent) from the previous month, and 4.4 percent (±0.7 percent) above January 2019. Total sales for the November 2019 through January 2020 period were up 4.4 percent (±0.5 percent) from the same period a year ago. The November 2019 to December 2019 percent change was revised from up 0.3 percent (±0.4 percent) to up 0.2 percent (±0.2 percent).Both of those paragraphs tell quite a story. Downward revisions for December make it more likely that GDP growth for Q4 2019 will end up below 2%, and remember that the retail sales figures are before inflation, which means real retail spending is piddling at an 12-month growth rate of around 2%.
Retail trade sales were up 0.1 percent (±0.4 percent)* from December 2019, and 4.0 percent (±0.7percent) above last year. Gasoline stations were up 10.4 percent (±1.2 percent) from January 2019, and nonstore retailers were up 8.4 percent (±1.4 percent) from last year.
Then notice the split between the growth in sales at gasoline stations (mostly reflecting higher prices through most of 2019) and non-store retailers such as Amazon.com, and the flatness in growth in brick-and-mortar retail stores. This is particularly shown in the near-zero or outright declines in spending in several retail sectors in the Holiday Season of 2018-19 vs the Holiday Season of 2019-20.
Nov 2018-Jan 2019 sales vs Nov 2019-Jan 2020 sales (before inflation)
Furniture and home furnishing stores +1.4%
Building materials/garden supply stores +0.4%
Sporting goods, hobby, book stores 0.0%
Health and personal care stores -0.1%
Clothing + clothing accessory stores -0.3%
Electronics + appliance stores -2.5%
Department stores -6.1%
Some of this reflects the rapid structural changes in the retail economy, as brick-and-mortar stores continue to close in large numbers. In fact, we found out in the recent revisions in 2019's jobs figures that the losses in retail were nearly 159,000 more than we had known them to be last year.
And while much of that brick-and-mortar spending has been replaced by online shopping, it still will mean the property taxes on your home will go up as those stores and mall spaces stay vacant and get taken off the tax base.
I also didn't bring up the drop in job openings to a 2-year low at the end of 2019, or another decline in industrial production for January. But none of that should be considered a positive sign for the economy now, and for the future.
No wonder why Larry Coke-blow seemed especially altered when he came on Faux News this weekend. I think the guys at the top know the story they're selling on the economy isn't hitting home for most honest Americans. So it takes some work to try to convince yourself to convince others that things are going great.
A thoroughly sauced Larry Kudlow tells Jesse Watters that the Administration doesn’t control the Bureau of Labor Statistics pic.twitter.com/4Z5TE4KfXs
— Acyn Torabi (@Acyn) February 16, 2020
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