Thursday, February 14, 2019

Sorry CNBC but the consumer cannot save your stock markets as retail sales collapsed in December

The business channel known as CNBC is more well known for being a pumper of stocks than it is for reporting real news, and it appears their latest propaganda narrative just got destroyed.


In nearly every broadcast over the past two months, CNBC has attempted to promote the 'Consumer' as being the strongest part of the economy and the one to save the financial system from recession.  However despite the fact that consumer debt is at an all-time high, and retail businesses are going insolvent by the thousands, the final nail in the narrative may have just come out on Feb. 14 as retail sales for December crashed to their worst level since the financial crisis.


Retail Sales for the Control Group soared in November (+0.9% MoM) so some slowdown was expected; but, the government's official retail spending data for December confirmed BofA's concerns and plunged... 
  • Headline Retail Sales -1.2% MoM (+0.1% MoM exp)
  • Control Group Retail Sales -1.7% MoM (+0.4% MoM exp)
That is the biggest MoM drop in retail sales since 2009 for the headline and the biggest drop in the control group since the 9/11 attacks in 2001!... 
“These numbers are horrible,” said Ward McCarthy, chief financial economist at Jefferies LLC. 
“It appears to contrast quite sharply with reports of Christmastime sales that were generally seen as quite healthy,” and for the Fed, “rate normalization is on the back burner for a long time to come.” 
This is the worst December retail sales print since 2008 (and 2nd worst in history)... - Zerohedge
Perhaps we here at Shotgun Economics don't really need to remind you that consumer spending makes up between 70 and 75% of overall GDP.  And since this is the case, there can be no bigger validation that we, along with Europe for sure, are now headlong into the recessionary cycle.

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