Comments on: Strong May auto sales are bullish for retail sales

By: Bob_in_MA

Bob_in_MA — Fri, 05 Jun 2009 13:30:34 +0000

Edward,

Yes, I'm just referring to the data point. To me, it's an very negative indicator, i.e., commodities rising while incomes are falling. And also unsustainable. Goldman's forecast of $80 oil may be correct, but the higher this commodity rally goes the more likely it ill lead to its own correction. The Goldilocks scenario didn't factor in gas at $2.75 or mortgage rates at 5.5%.

By: Bob_in_MA

Bob_in_MA — Fri, 05 Jun 2009 12:30:34 +0000

Edward,

By: Edward Harrison

Edward Harrison — Thu, 04 Jun 2009 21:17:32 +0000

Bob, you make a good point on that factor in regards to retail sales but it won't help GDP because crack spreads are abysmal. Valero just came out reporting that it's Q2 will be a loss. That says we'll see a bad oil import number which won't be offset by U.S. production or refining.

By: Bob_in_MA

Bob_in_MA — Thu, 04 Jun 2009 20:59:27 +0000

I'll bet a donut that it's positive on the jump in gas. That's what happened last year, and the market loved it…

By: Edward Harrison

Edward Harrison — Thu, 04 Jun 2009 12:56:07 +0000

you'll notice that retailers reported results BELOW estimates, suggesting that the 'balance sheet recession' is going to be a drag on spending along with unemployment.

"U.S. retailers reported same-store sales fell in May below expectations, as pressures like rising unemployment continued to curtail consumer spending."

There is good reason to be sceptical about an uptick in retail sales.

By: Billblatt

Billblatt — Thu, 04 Jun 2009 01:55:13 +0000

Yeah, but how much of the US $2.8 trillion is defense, which is to say government spending? Two-thirds?

Defense is the most corrupt, inefficient industry in the world. It has to be viewed separately from the consumer-driven businesses that drive genuine, sustainable growth.

The US economy is big enough to supply data that supports any hare-brained idea. Please give real analysis or give it up.

By: Bob_in_MA

Bob_in_MA — Wed, 03 Jun 2009 21:21:58 +0000

Gas prices rose close to $.50, or 25%, in May. Probably more than 15% above the seasonal increase. That would be almost $5B and would constitute a more than 1% rise in total retail sales.