Talk about a misleading headline!

 

The Wall Street Journal headlined a report yesterday:

Americans Are Spending on the Holidays After All

So far so good for the holiday shopping season

The report claims:

The Commerce Department on Thursday reported that retail sales rose a seasonally adjusted 0.3% in November from October. Even factoring in some downward revision to previous sales data, this was better than the decline of 0.1% economists polled by The Wall Street Journal were looking for. It is just the latest indication that, despite the downbeat attitudes Americans profess in polls, a strong job market and continued reserves of savings built up early in the pandemic are giving them the wherewithal to keep shopping.

The news is better, really, considering what has been happening with prices. Overall inflation is still with us, but in many retail categories—particularly ones that end up under the tree—prices have turned lower. Tuesday’s inflation report from the Labor Department showed that toy prices were down 2.8% from a year earlier in November, that sporting goods prices were down 1.8% and that prices for computers, smart home assistants and the like were down 4.6%. Gasoline prices have been falling, too, and leaving Americans with extra cash to spend elsewhere. Exclude gasoline stations, and Thursday’s report showed that retail sales were up 0.6%.

The upshot is that inflation-adjusted, or real, retail sales in November were pretty good. It is still unlikely that real consumer spending will grow quite as swiftly in the fourth quarter as during the third, when it grew at a 3.6% annual rate, but it should be solid.

There's more at the link.

Is it true?  Well, that depends on how you define "truth".

Let's begin by saying that the "official" rate of inflation bears about as much relation to the truth as I bear to executed World War I spy Mata Hari.  I said last year, and Karl Denninger has recently repeated, that the real consumer inflation rate, based on what we actually buy and spend rather than what the government's economists laughably suggest we buy and spend, is over 30% - almost ten times higher than the current official estimate of "3.1% before seasonal adjustment".

Thus, to claim that "inflation-adjusted, or real, retail sales in November were pretty good" because they "rose a seasonally adjusted 0.3% in November from October" is . . . well, it would be laughable if it weren't so monumentally stupid.  What that 0.3% rise is measuring is how many dollars consumers spent in November compared to October.  The real question is, how many actual things - how many goods, how many services, how many items that can be physically counted - did that money buy for consumers?  Given a real, effective rate of inflation of around 30% or more for most consumers (in some areas of the country, it's more like 50%), if you answered "Less - much less" to that question, you win a coconut.

It's not that consumers are spending more to buy more, but that consumers' dollars are buying less.  That's the real measure of the health of our economy, and by that standard, we're doing dismally.  Just look at your own shopping cart in the supermarket, compare its contents to last year at this time, and you'll see that for yourself.  It's not a difficult calculation.  How much is every dollar I spend buying for me this year, compared to last year?  When I look at my shopping cart, the answer is, "About a third less, overall."  Karl Denninger obviously found the same thing, as illustrated by his trenchant comments, linked above.

The powers that be in our government, whether of Republican or Democrat persuasion, whether elected or appointed, whether bureaucrats or politicians, are united in their determination to make us think that we and our economy are doing better.  The truth is, we're not.  The truth is, we're dangerously, frighteningly close to an Argentina-style economic collapse.  It's less likely to happen here in the short term, but that's only because we have the entire world's economy by the short and curlies, given the dollar's domination of world trade and reserves.  However, that's changing.  Investigate for yourself how many countries, including some of our major trading partners, are actively seeking to use currencies other than the dollar in their international transactions.  I don't blame them.  They're seeing the dollar getting weaker by the day, and they're worried that their own economies might get caught up in the mess that is ours.  In their shoes, I'd be taking the same precautions against that.

Go back and re-read that WSJ headline in the light of the economic reality described above, then ask yourself:  Why are they so desperate to mislead us?  Why are they trying so hard to paint a rosy picture of an economy that's tanking?

And if, after that, you still trust government statistics about inflation (or anything else), there's this bridge in Brooklyn, NYC I'd like to sell you.  It's beautiful!  You'll make a mint out of charging tolls for its use!  The price is right!  Cash only, please, and in small bills.

Peter