U.S. Retail Sales Take An Unexpected Fall

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U.S. Retail Sales Take An Unexpected Fall [uk.reuters.com]

U.S. consumers curbed their Christmas spending in December and more people filed claims for jobless benefits last week, casting fresh doubts on whether the economic recovery can last once government support fades.

The Commerce Department said on Thursday retail sales fell 0.3 percent last month, the first decline in three months, as consumers spent less on vehicles and an array of other goods during the holiday shopping month.

November sales were sharply revised up to a 1.8 percent gain and October sales were bumped up a touch as well. Financial markets had expected retail sales to gain 0.5 percent last month.

[Digmen1]

Retail sales are never going to rise until the number of unemployed starts to drop markedly.
While people are out of work or worried about losing their jobs, they will not increase spending.
Obama's Job creation scheme is said by the government to have created or saved 680,000 jobs ! That is a drop in the bucket when there are millions of unemployed.
The US Chamber of Commerce says they and the government need to create 20 million jobs in the next 10 years.
Where are these going to come from ? Factories are closing, outsourcing is increasing ! Companies and corporations do not create jobs because the country needs them to. They create jobs when they need more employees !
I think Obama needs to stop worrying about everything else and get serious about job creation.
I think the US needs to get back into manufacturing.
You need to make stuff to sell that other people and countries want.

[HRoth]

Yeah, all these people unemployed are 10%, and then the people who got fed up with looking and people who are part-time because they can't find full-time add up to another 17%, according to an article I read recently. So that is a huge chunk of people who are not out there spending. This is the elephant in the room. I know people who just simply won't talk about it because it scares them too much.

I don't think manufacturing is the answer, though. I think it is making business a lot smaller and focusing on providing specialized goods and specialized services domestically and locally instead of importing and outsourcing--IOW, getting small. But I think we won't do that until more falls apart and we don't have any other choice.

I have no idea how or whether ecommerce is going to weather the future. I just keep working on developing other income and skills.

[LifeinAsia]

Manufacturing in and of itself is not the answer if you're just going to manufacture stuff that people don't want to buy. (Hello- anyone in Detroit listening?!?) Paying people to work to make something that will never get bought is just pushing the problem further down the road.

I am not a big fan of subsidies. However, if it's a choice between using tax money for unemployment benefits or using that same money to subsidize companies to move manufacturing back onshore from offshore (*IF* that money is used to hire employees instead of bonuses for management) and pay those same people to work, then I *might* be in favor of some sort of subsidies.

[frontpage]

It's not an 'unexpected fall' at all. 4.1 million people who lost their jobs since January 2009. According to data from the Bureau of Labor Statistics, that's the most job losses in a year since 1940.

[Digmen1]

What they meant is that the fancy economists and govt officials were hoping that the fall in the US economy had stopped and that therefore sales would start picking up.
What they hadn't taken notice of that firms are still dropping staff and now City Councils and State Governments are starting to drop staff to try to balance their budgets.
So how can sales pick up ?

[dickbaker]

So how can sales pick up ?

Stop giving taxpayer dollars to state governments and government projects, and stop making business owners nervous. There's money to be invested in business, but the owners are afraid of what the government is going to do next. If the owner hires a person, will the owner be paying more in taxes on that worker? Will the owner be paying more in taxes on himself, and how much?

Nobody knows what's going on, and it's making everyone gun shy.

[dpd1]

The best thing you could do is just get everybody to stop talking about it. I refuse to watch the news, because you turn it on at night, and after the first 5 minutes, they've got you feeling like you may as well go out and start your car with the garage door closed. News people love making everybody feel like the world is coming to an end. Then you've got this new fad of conspiracy stuff they play on AM radio all day that has people thinking marshal law is going to be called any second, and we're all going to be sent to the "FEMA prison camps". I have friends who are otherwise perfectly intelligent people that truly believe the world as we know it is going to end... the whole US, if not world, is going to fall apart, and we're all going to be roaming around like Road Warrior any day now. And it's because they're brainwashed by all the nonsense you see and hear in the media. It's not the people who have no money that hurt everything... It's the people that DO have money, but are afraid they're going to end up like the people without money... so they don't spend it. If those people can just break out of that phobia and move on, then it gets better. But as long as they are inundated with bad news every single day, they are going to keep on thinking that way. Luckily most people just eventually get tired of not spending money and they just move on. I get the feeling that is starting to happen, inspired by the ridiculous deals you can get on major purchases right now. But it's a slow process. But I truly believe time is the only thing that can fix these things. No amount of money or legislature can cure fear. That's why I think all the money they keep throwing at this stuff is just a waste. But I just tell all my friends... Want to feel better? Just stop watching the news. I guarantee your attitude will improve 100%.

[HRoth]

I have to say that my mood improved a lot when I quit watching TV altogether about 4-5 years ago. You are right about the news and whatnot making people feel paranoid. I just read a review of a movie last night that was about Doom and people eating their pets and each other. I think this is absurd. I do think our lives are going to change, and it might be a rough ride, but I think it will be for the better eventually. I don't think not talking about it at all is good, but talking about it reasonably, acknowledging it and being grateful one has whatever and considering how to deal with change is important, IMO.

I also think you are right that people get sick of being scared. I thought I saw that some a few months after the whole implosion at the end of 2008. Usually January is when things start to pick up for me. It's been very uneven so far, so I'll see.

In my niche, I've noticed that the people having the worst trouble are folks selling raw materials to tiny businesses. I've been discontinuing my raw materials for the past year and making more original products. They are used to give the buyer a sense of empowerment, but I have also differentiated them from other similar widgets by turning them into small luxuries, thinkign that people can't afford a plasma tv anymore (maybe they never could), but they can afford my little widget and it will make them feel better every time they use it. I'd be interested to hear if other folks here have changed the focus or direction of their widgets, tailoring them to be more luxe or what.

[dpd1]

I've thought about that as well. Technically I have actually grown through the hard times. That's why I try not to get too down, because I figure I can't complain too much if I'm actually doing more. But this year will really be the test, because I'm not going into the new year with a big head of steam and higher sales, like the last 5 years. I don't think that's the economy, I just think my biz is leveling off. There's only going to be so much business at a certain level of offerings, until you step up and offer more. But my stuff is technology related, mainly hobbyist, but also commercial. My gut tells me that the economy really won't make that huge a difference in the end for me. My thinking is that it may be like you said... People can't have the big vacations, boats and motorcycles, so they treat themselves to the smaller hobbies instead. And that's where I would come in. My stuff is something that can be used all day long at home, offering something to keep you entertained, but not cost a fortune. So for all I know, a better economy could hurt me in a crazy way. But I deal with lots of people for materials and parts for my items, and I have noticed in the last year that I get treated a heck of a lot better by material vendors lately than I use to. I just got a coupon for $300 off my next order from a local materials dealer that acted like they were doing me a favor selling me something a couple years ago. As they say... The bigger they are, the harder they fall.

[HRoth]

I've heard the same thing from people dealing with big vendors, that they are more willing to accomodate and nicer. I went in with a friend of mine who wanted to order some raw materials from a bigshot vendor. Typically they have a line-item minimum of $1000. They were willing to lower it to $200, so a group of us were able to get materials we would ordinarily never be able to afford for our widgets. So there's an upside.:)

[dpd1]

Yeah, that's one of the few good things about bad times, is that they usually affect everybody... So at least you can get something out of it. The ones that kill me though are the guys that do the reverse and just punish everybody even more. Like the shippers just did.