By Graham Summers, MBA
In the last two days, I’ve addressed two major piles of economic BS… the jobs data from January… and the inflation data.
By quick way of review…
1) The reason the U.S. economy supposedly “added” 500,000+ jobs in January was due to an accounting gimmick, NOT because those jobs were actually created.
2) The Bureau of Labor Statistics (BLS) openly admits this, citing that without its “population control effect” the economy added… 84,000 jobs.
3) The only part of the inflation data that has dropped has been in Energy prices.
4) The reason Energy prices dropped was because the Biden administration dumped over 250 MILLION barrels of oil in the last two years.
Today we’re addressing a new pile of BS… the January retail sales.
In case you missed it, January’s retail sales were fantastic, up 3% month over month.
Even more incredibly all 13 retail categories rose month over month. This is the first time this happened since the economy emerged from the depths of the pandemic shutdowns.
The economy must be roaring right!
WRONG.
The retail sales were NOT adjusted for inflation.
Inflation is somewhere between 6.4% and 9% depending on the data you track.
So the retail sales were actually NEGATIVE when you account for inflation. Or put simply, this supposed retail “growth” was all due to the prices of things rising.
Think of it this way.
Let’s say your boss gives you a 10% raise. Now let’s say that inflation is also 10%.
Did you really get a raise?
No… your income is precisely where it was before relative to your cost of living.
THAT’s what is happening in retail. Everythings costs more… so the sales look stronger.
If you don’t believe me, consider the below chart of credit card debt. Americans are maxing out their credit cards…
While eating into their savings…
Put simply, the retail numbers were total BS. Americans are spending more just to get by because of inflation… not because the economy is booming.
And yet… investors are buying stocks based on this BS!
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