Global Growth? Retail Sales Flop in US, UK, Canada, Germany, Australia

Mish

Consumers unexpectedly threw in the towel in 5 countries but the central banks and the IMF insist everything is fine.

On February 14, I noted US Retail Sales Dive, Negative Revisions Too. This will impact both 4th quarter and first quarter GDP estimates.

On February 22, Bloomberg reported Canadian Retail Sales Drop Unexpectedly.

"Receipts fell 0.8 percent to C$49.6 billion in the last month of 2017, Statistics Canada reported Thursday. It was the biggest monthly decline since March 2016. Economists were expecting no change during the month."

On February 16, the Financial Times reported UK retail sales figures disappoint. The results were positive but barely.

"The volume of retail sales grew by 0.1 per cent month-on-month, far below analysts’ expectations of 0.5 per cent growth in January, according to a poll from Thomson Reuters. On the year, sales were up by 1.6 per cent, from 1.4 per cent, far below expectations for a 2.6 per cent rise."

On January 31, Reuters reported German Retail Sales Unexpectedly Fall in December.

On February 6, Business Insider reported Australian retail spending for the Christmas was far weaker than many were expecting.

Given the Fed's outlook and increasing expectations of four rate hikes plus tapering in the US, tapering in the EU, and rate hikes in the UK, such reports must be meaningless.

Also note the IMF made a "Brighter Forecast" for the global economy in January. When has the IMF ever been wrong?

Mike "Mish" Shedlock

Comments (12)
No. 1-12
MorrisWR
MorrisWR

Lower spending, lower saving rates, increased debt and stagnant wages. Everything is awesome.

caradoc-again
caradoc-again

Consumer tapped out. What happens to major exporters when their markets pull in their horns? Will Germany stimulate home demand as it could take a large export hit and is very export lead? What ripple effects?

caradoc-again
caradoc-again

ECB accuses Trump of currency war as Euro strengthens - hitting exports. Meanwhile German export markets fall back due to domestic consumer stresses. Who is heavily dependent on exports? Who gets a double whammy? Any consequences?

Realist
Realist

Slow growth continues in these economies(2-3%) as it has for many years now. The optimists (governments, central banks, etc) are over-optimistic. Pessimists (Mish et. al.) are too pessimistic. Job growth continues as well. However wage growth only occurs for the most highly skilled (and those at the top of the income ladder). As a result, the vast majority of workers (ie consumers) are seeing their buying power erode slowly over time. (2% economic growth, 2% inflation, no wage growth is a recipe for more misery for many workers). What can individuals do to improve their lot? 1. As many have mentioned on this site- live below your means, save and invest the rest. 2. Improve your skills and education to get a higher paying job. 3. Become an entrepreneur and grow your own business. I’m sure others can add to this list. Personally, I am becoming more pessimistic about economic growth slowing as a result of possible trade wars that seem to be brewing. Trump could definitely throw a wrench into the works.

TheLege
TheLege

Realist, you can only be a troll . Your opinions are, for the most part, awful. If you're not trolling, you're a dunce. Sorry, but this is the truth. We (the global economy) are in a once in multi-generation crisis the likes of which won't be seen for several generations hence. The (social, forget financial) fallout is going to be 'off the dial'. People with limited means who are relying on inheritances will, instead, end up looking after the very people they were meant to be be inheriting from. You have a handful of years to prepare for the fallout. Wake and smell the coffee or wake up and deal with the fallout when the day arrives.

Realist
Realist

Thanks Lege. Personally, I’m doing very well thank you. You are entitled to your opinion. I’m entitled to my opinion. During my lifetime I have lived through a lot. I have seen people attempt to profit by writing books (or blogs) about the coming boom, or coming catastrophe. Blah, blah blah. Too much hype. All necessary in order to get attention. No one notices “THE COMING MEDIOCRE MODEST ECONOMIC PERIOD”. To get noticed you have to be extreme. Sorry, I don’t buy it.

AWC
AWC

Don't worry, be happy. The Feds got your back. /s

AWC
AWC

You've pretty much said it there Realist. An individual's economic lot in life is local. Aside from "a little bit of luck and the creeks don't rise," we all have choices. Some will be good, some not. Those who take responsibility for the wrong choices they make will gain much more than those who point blame elsewhere. Call it tuition and move on. For sure, if one is investing, based not on obtained knowledge, but on advice from misc. Sages, Gurus and Bloggers,,,well, there is only one direction to turn when things go wrong. That be the mirror.

Carl_R
Carl_R

This post puzzles me. If I read the table right, sales appear to be up year over year by about 4% from January a year ago. Yes, January sales are down from December, but isn't that always true? What am I missing?

stillCJ
stillCJ

Editor

Is it possible the main consumers have finally gotten saturated with "stuff"? My wife told me today everyone she knows is trying to sell extra unwanted "stuff". Then again, everything made in China will have to be replaced in a year or so.....

Advancingtime
Advancingtime

It is not only retail sales that have issues. The road ahead looks very challenging for automakers. Problems are building and lurking around every corner. The combination of overcapacity coupled with high consumer debt and higher interest rates paint an ugly picture going forward. When you add in the fact millions of vehicles are coming off leases the challenge facing automakers becomes formidable.

Delinquencies on subprime loans made by non-bank lenders are soaring toward crisis levels just as some of the big banks long friendly to this sector have pulled back from the auto lending business. To top it off, state regulators are circling the industry and looking at whether it preyed on borrowers and put them in cars they couldn’t afford. More on the problems automakers face in the article below.

http://brucewilds.blogspot.com/2018/02/automakers-face-ugly-and-bumpy-road.html


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