Why did the media ignore retailers’ bad Black Friday because experts warned of impending bankruptcy?

Why did the media ignore retailers’ bad Black Friday because experts warned of impending bankruptcy?

Facebook
Twitter
LinkedIn

[ad_1]

You can try to blame Omicron for eating the news on the commercial media’s failure to and wrong reporting of pathological Black Friday and impressive Cyber ??Monday sales, but this won’t get you too far. The type of criminal police reporter who once covered the retail industry will not be suppressed in pandemic reports.

In fact, the slow shrinkage of American consumers is basically not mentioned. We should believe that they really shop early because they are encouraged to do so in response to supply chain failures. But as we will see below, commodity spending fell in the third quarter and retail inventory increased this quarter, which is the opposite of what you would observe when you make a purchase when it is difficult for a retailer to maintain commodity inventory.

In fact, the media underestimated the warning of economic recession. Post from late October:

Two series-from The Conference Board on business conditions, employment and income in six months, and from the University of Michigan on financial conditions in one year and business conditions in one and five years-tell the same story : Emotions peak in spring or early summer. It has been falling sharply since (Blanchflower and Bryson 2021a). This is true for the entire United States and the eight largest states where the World Consultative Council collects data.

Why is this important? Well, these sentiment indexes have fallen at the same rate as we saw before the Great Recession in 2007 (Blanchflower and Bryson, 2021b, c). We call it the 10-point rule. When the index drops by at least 10 points, this is an early warning sign of economic recession.

We tested this proposition for the United States from 1978 to September 2021. The results show that consumers’ expectations of future economic trends are highly predictive of the economic recession in the next 6-18 months, thus providing an early warning system for the economy (Blanchflower and Bryson 2021a).

Table 1 Expected data from the consultation committees of the eight largest states in the United States in 2007 and 2021

It is not difficult to infer that consumer confidence is supported by government intervention and spending, and their withdrawal has produced more caution when Covid is still very popular.

Coming from CNBC in a few days, End of October:

Spending on durable goods such as home appliances and automobiles fell by 26.2%, spending on goods fell by 9.2%, and spending on services rose by 7.9%, down from 11.5% in the second quarter.

Due to the end of government stimulus payments, disposable personal income fell by 0.7% and fell by 25.7% in the second quarter. The personal savings rate dropped from 10.5% to 8.9%.

Neither Lambert nor I remember seeing any reports on changes in same-store sales at major retail stores, which used to be the main content of business reports. We don’t remember seeing any major media reports about how bleak this Black Friday is this year. To make matters worse, when it comes to shopping days, the store’s traffic has increased… the result is completely out of touch with revenue.

Kevin W sent this tweet storm:

I don’t know what the crash is, but the Fed’s plan to tighten policy as consumers tighten is wrong. Remember, the Fed mistakenly believes that it can stimulate economic growth because it can only stimulate asset speculation, but it can curb economic activity. Since “shrinking the panic,” these years have been trying to extract some air from the financial markets very slowly…and behaved as if it had finally plucked up its courage. We will see how long its determination can last.

In order to further confirm and understand more details about the poor retail situation, the van Meter below provides the data. For example, he showed an increase in inventory levels at 8:58, even though the media reported a decrease in inventory levels.

And don’t assume that Cyber ??Monday will come to the rescue. This year’s sales have declined slightly compared to last year, and given inflation, this means that the actual decline has been even greater.

Therefore, the report on the state of retail is consistent with the (nonsense) Covid report: facts are ignored or fabricated in order to do everything possible to preserve year-end expenses. We will see how much stuff can be stuffed under the carpet before a large number of unwashed members of the public inform that it is not only lumpy but will move.

Print friendly, PDF and email



[ad_2]

Source link

More to explorer