The American public continued to spend, spend, spend in April:
In March retail spending shot up well above the trendline of the past few years, and in April it stayed there. This is not yet enough to make up for the 3-month plunge last year, but it's getting there.
Unsurprisingly, we're all getting offline and starting to do more of our shopping out in the real world:
This only goes through the end of 2020, and I wouldn't be surprised if we're back on trend by the middle of this year.
While I was looking up these numbers, I got curious about spending at the start of the pandemic. There was a huge downward spike starting in mid-March, but different products went down more than others:
Grocery spending actually went up, which is no surprise since (a) everyone has to eat, and (b) all the restaurants were closed. Beyond that, I'm a little hard pressed to tell any kind of unified story about these numbers, though it sure looks like once the pandemic became official we all decided almost immediately that we didn't care how we looked anymore, which would explain the massive drop in spending on clothes and personal care.
Can you make up a story that explains all this? If so, you can join the pundit narrative hall of fame. For this assignment, pretend you're David Brooks.
Based on that second chart, most of the things that had declining sales were related to people not going out or anywhere (e.g. cars, gas, sporting goods, clothes, etc.). The only things on that list not related to being locked inside (appliances/electronics and furniture) are big ticket items you may put on hold while finances are up in the air. Also, who wanted delivery men bring fridges/couches into your home while we are avoiding human contact? Cars sort of fall into both - if you aren't going any place maybe you hold on to your old clunker for a little while longer. Building materials could be related to the increased cost and availability. Have you tried getting lumber lately? Not only is there very little in stock, the price is out of control.
I'd put it slightly differently, in that, for the most part, appliances and furniture are things that you update more or less "when it's convenient".
You have a bed (or a fridge or a TV or a sofa) and they do the job. You've been thinking about replacing them because the sofa springs are broken, or the TV backlight flickers in one corner, but it's a low priority replacement -- you can live a year or three putting it off every month.
And once the pandemic starts, everything is lined up against you. The replacement is low priority. It's a hassle to try to figure out which fridge (or TV or bed) you want based on internet research without being able to see it in person. Maybe at least one person in your family is scared of contact with delivery people. etc etc
Same with cars (can put it off for a year or two).
Clothes of course you can put off the purchase, but there even more so than any of the above, it's the actual seeing them in person that gets you buying.
(There is an interesting story here regarding the importance of "seeing it in person/trying it on" vs "being able to try it on virtually and buy over internet", and the importance of "buy it for myself" vs "buy it to show off", and I honestly have no idea of the relative weightings along these two axes. How much of the talk of buying clothes over the internet was real vs hype?)
I’m keeping my powder dry for now.
Demand for campers went thru the ceiling. I’m gonna wait it it out until the used ones hit the market in mass.
That said we had a very good year income wise. Best ever. By far.
[sniff sniff] [adjusts glasses] Once tyranny takes hold and the government decides everything for you, smocks are the hottest of the hottest.
I just hope a Jessica 6 pops through...
I know what that means!
I'm glad someone does. For a second, I thought he was going full Monty on us.
I can answer at least for some large appliances. Refrigerators, freezers, washers, and dryers just weren't available. We tried to buy a chest freezer in late March or early April, and there were none at any size, any price, anywhere. My husband finally looked up an old client of his who told him no large appliances were making it over from China at all. That meant any appliances made in the US had already been sold out for months to come. It wasn't till fall when a few freezers started to trickle in.
Same thing for furniture. I wanted to get a new couch to replace a 25 year old one that had seen better days. I ordered it in the middle of June. It was finally delivered in December.
Our microwave failed. None were available. Got one from a friend who was moving.
Needed a garage door opener. None were available. Took a year to get one. The wife had no problem buying a used airplane even though the market is hot.
It's surprisingly hard to live the decent life without a microwave, isn't it? No comment on the "used airplane."
"Peacocking No Longer Fun As Thousands Die Daily"
People are hunkering down. They're eating at home because restaurants are closed, working from home in their PJ's (or underwear, more likely. But let's give them the benefit of the doubt.), and traveling from the bed to the couch instead of across the country and abroad.
Reasons for this include mandatory lockdowns and restrictions, health concerns, and economic worries as employment rises and benefits systems prove ineffective.
Perhaps the most overlooked reason for declines in spending is the faux pas of having your Instagram story about your new outfit end up next to a photo of a makeshift morgue or a healthcare worker wearing a page protector as a face mask.
In other words, it's in bad taste to peacock. And half the fun of buying anything is showing it off. There's no status gains to be had from showing off your new haircut. Instead, it's better to signal that you're a mess just like everyone else. It's hard to create content that reflects your personal brand when you can't broadcast the unique places you're visiting and the picture-perfect foods you're eating. We're all stuck on the couch here.
So we're spending money trying to fix our places up, because we read somewhere that DIY is always cheaper. We spent our home budgets on furniture and high end appliances that would make our guests jealous when they came over, but now nobody can come over. Showcasing your DIY skills would be good for your brand, though.
Status signaling has taken both a moral and logistical hit. And as is the case with everything else in this pandemic, we're forced to do more with less.
"For this assignment, pretend you are David Brooks."
OK. It's all meritocracy's fault, you see. And if that doesn't make sense to you, consider that culture is destiny. Still not making sense? Try feedback loops between religion, culture and outcome.
I banged my assistant!
If you're Brooks you gotta beat around the bush. Both figuratively and ....
David Brooks isn't like he used to be, at least on his nightly PBS spots. That previous guy (the LOSER!) seems to have knocked most of the "Republican" out of him. He frequently agrees with Jonathan Capehart (maybe he misses Mark Shields?), and seems altogether diminished and almost shy. So I'm assuming Mr Drum meant the former David Brooks.
"When the Applebee's sneezeguard cannot sustain the volume of America's coughing..."
Spending?! People are spending money?! Oh my GAWD! Inflation Monster will come and EET US IN OUR BEDZ!!
Obviously the only thin to do is slash government spending immediately! And end UI! And cut capital gains taxes! How else can we survive?!
Real wages are down. Way back in Trump time even.
https://www.forbes.com/sites/patrickwwatson/2018/09/25/real-wage-growth-is-actually-falling/?sh=19e141eb7284
Inflation is real, esp. if wages don't keep up. And they don't keep up because wage inflation is the one thing the Fed is afraid of. They don't care about 'asset' inflation, never mind that a big part of those 'assets' is real estate, you know where people live.
In other news, a first I believe for US gas prices.
https://www.fox5ny.com/news/gas-hits-7-in-virginia
But keep being an inflation denialist.
Rofl. You think a temporary pipeline shutdown is the same as inflation.
We've had pipeline shutdowns before, and refinery fires, and flooding at tank farms, etc, but never $7.00/gal gas that I know of.
Price gouging is new?
Lolz, then supply surges, inflation even drops more than the 1.3% reopening fluff still hanging on yry figures(which will be gone by September). Tell me then boy, where is the inflation at?????
The only stupid the libtards made was thinking yry inflation wasn't going to fill in the gap. Those idiots just couldn't get this wasn't a normal recession. Don't be a similar idiot and meet your same fate.
Is that why the soap is behind a locked cabinet now?
At least TP is back.
No, it's because the soap is made from human fatty tissue.
America is Fight Club now.
https://www.theguardian.com/culture/2019/mar/13/its-very-good-how-soap-made-from-siphoned-human-fat-left-audiences-in-a-lather
When the final determination is made on what "happened" it won't be reported here. We will all probably be long gone by the time they figure it all out.
The corporations called the shots. ALL OF THEM
Take food processing. They felt COVID first. Employees elbow to elbow and even though they sanitize like crazy the airborne nature of the COVID beast meant the AC systems just kept on recirculating the airborne particles. They already wore masks so a mask mandate made no difference to them. The employees were scared but still worked. When the vaccines came out? Food workers were considered essential so they got them first AND WERE REQUIRED TO GET THEM. Ron DeSantis can say what he wants but he allowed FLorida companies to set their rules. Norwegian Cruise Lines embarrassed DeSantis the other day. DeSantis will let them require vaccine passports.
But demand for food stuffs decreased as restaurants closed and prices did stabilize. Now that people are grilling, and eating out, the prices should go up until the supply adjusts to meet this pent up demand. Then they will drop
Its a bizarre situation and comparing the affects to the Spanish flu of 1917 is useless.
Just give it time. We are still in the process of re-opening. No one can find help because people are still very concerned about this illness. WalMart dropped the mask requirement. I was there today and 98% of the people I saw were wearing a masks in spite of having the ability NOT TO HAVE TO.
Nobody wanted seat belts. You could bypass them at first. Now it's second nature to us all. I think masks will be the same way
Total consumer demand didn't recover until this spring. The Spanish Flu's fall/winter surge was epic with 1.6 million population adjusted people dying between the age of 20-40. Blows away Covid.
Sadly the Democratic party refused to take advantage, instead of letting the idiotic Northern Republicans continue to dominate party messaging, instead of traditional democrats.
I live on the east coast. K DRum lives on the west coast
To be honest with you I thoroughly enjoy Kevins pictures in and around CA.
This is a you tube video from a very down to earth guy who's "thing" is geography and maps
For those of us used to crowds, freeways, and standing in line.
This might appeal to you (and KD as well)
https://youtu.be/w3sRHar1Buk
Dem is president, bye bye mask requirements. Open da skoolz!
Uh, punk loser, it's those same northern Republican morons still whining about it. Maybe you don't realize that we are entering the viral dead season.
DBAP, amiright?
> pretend you're David Brooks
I just shot myself.
That command ("pretend your David Brooks") was the last thing Courtney Love* said to Kurdt, as he was fleeing rehab in LA to return to Seattle in March 1994. So, your response is an echo.
*Still surprised -- relieved, but surprised -- that the Widow Cobain was not the Nirvana-adjacent person who would go MAGA. Odds were always good in known Croat Krist Novoselic embracing his people's WW2 era belief structure, though.
Novoselic is a Serbian name.
Tell that to him.
LOL. He was born in Compton...like me! Then moved to San Pedro, maybe you are right, Croatian.
Back in the day there were Croatians in San Pedro, now like everywhere else in LA it is just pretty much Mexican.
Can you make up a story that explains all this? If so, you can join the pundit narrative hall of fame.
Not quite getting what's puzzling Drum here. We had a pandemic strike us at the time, with associated shelter in place orders , closures, and widescale changes in lifestyle (and hence buying behavior). All of these sectors were obviously affected. I'm not sure there needs to be a "unifying" theory beyond that. (I mean, most people want to go to showrooms when they make major furniture purchases; so that one's not to hard to explain; gyms, tennis courts and youth leagues were shut down, so the plunge in sporting goods isn't too puzzling; and so on).
I beat the living sheet out of Trumptard last night, mercy. I am going to DNA test the finger I cut off. Then send it to his friends. He better hope There is nothing off with those figures.
Are you one of the nihilists?
Nah. Just a troll.
Supply and demand. Prices should go up. Companies took capacity offline. Now they need time to adjust. Don’t spend money.... or be prepared to pay extra. This is the way of the world.
I have a theory regarding the personal care products and clothing purchases decreasing. I haven’t looked at the data to confirm, but my hypothesis is that these decreases are due to a larger number of women leaving the workforce during the pandemic. I would guess that women spend more on clothing and personal care (makeup, hair products, other grooming items). With more women leaving their jobs - either due to lay offs, lack of childcare when schools and daycares closed, etc - that had impacts on those markets. Now that a lot of them are at home and unemployed, they have less disposable income for items that are somewhat considered luxuries.
They spend more time in the bathroom, that's for sure.
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