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This news was posted on the 14th:
US Retail Sales Collapse In December: Biggest Drop In A Decade Those are official numbers and are troubling enough, but my experience leading up to that article has me really concerned about what we'll see for February. As with many of you, I order products through Amazon and Walmart. I've been a Prime member for quite a while just to get the free 2 day shipping. Over the years, some of those "2 days" have been 3 days. My general experience is that orders are delivered on the expected day supplied at the time of order. I placed an order on 2/8 at Walmart for in-store pickup. Part of the order was due on 2/12 with the rest on 2/14. Both parts arrived a day early on 2/11 and 2/13. That by itself was unusual, but not too concerning. I'd placed an order with Amazon on 2/9 for locker pickup with free 4 day shipping. I could've had free 2 day shipping, but I wanted to combine the pickup in my trip to pickup the Walmart order. It was delivered the next day (2/10) - three days early!!! The order wasn't even half the amount needed to qualify for free next day delivery. I made another order from Walmart on 2/13 with free 2 day delivery to my door. It arrived unexpectedly the next day. Three orders with all parts delivered early. This tells me that order volume is so low that orders are being processed before they normally would be. Then those orders are passed to delivery. Faster delivery always costs more, but these are making it through the logistics channel earlier than they should (at standard rates). It's just my experience, but when the February Retail report is released, don't be surprised if it's like the down side of a roller coaster. Do you know how horrific the latest jobs report was?
Get it here to see the numbers for yourself: https://www.bls.gov/news.release/pdf/empsit.pdf Table B-1 (page 33 of the PDF) is where the action is. The far right of the top line is where you find the "fantastic" news that 304,000 jobs were created in January. The BLS counts on you not reading its BS and sadly this administration isn't any better than the last one in giving us the real employment (or financial) situation. It's true the real numbers are released - if you know where to find them and how to read them. For those of you that haven't had to do any modeling, let me briefly talk about Seasonally Adjusted. You probably understand that there are a lot of flowers sold in February, fireworks in July, and toys in December. Businesses like to make projections. It helps for planning things like purchasing inventory and adjusting personnel levels. If you were a toy company forecasting January sales just based on what happened during the 4th quarter, you'd be off quite a bit because sales of toys drop in January. Seasonal adjustments are a way of smoothing the data so that better forecasting can be done. Back to the jobs report - notice that those 304k jobs is a seasonally adjusted number. While on the right side take note the the jobs gain from November to December is 222,000. That makes 526,000 new jobs in the last two months. Aren't times great? Look at the columns on the left for the non-seasonally adjusted data. That's what what we see in real life. The number of employed for the last 3 months: November: 151,375 December: 151,182 January: 148,201 Let me do that math for you. In December we lost 193,000 jobs. For January the loss was 2,981,000. Total jobs lost the last two months - nearly 3.2 million. The difference between the reported gain and the actual loss is 3,700,000 - I ran the numbers twice as it seemed odd that it should be such a round number. So, how good do you feel about 3.2 million people losing their jobs? But John, there was a partial shutdown of the government - that explains the losses. Take a look on PDF page 36 on the line Federal, except U.S. Postal Service. You'll see a loss of 4,500 jobs for December and 3,900 jobs for January. That's less than 9k jobs out of the 3.2 million loss. While you have the PDF open, look at table A on page 9. The top line reads Civilian noninstitutional population. Page 6 explains this is an annual adjustment that Census provides BLS. This shows 800,000 less population than the Census Bureau was projecting for this time from a year ago. This reduction in population growth is stunning. The economic and demographic impacts are well beyond what we can discuss here. Just be aware - it isn't good. Have a nice day. If you know anyone that lives in Chicago or Illinois - Please pass this information to them so they can decide if they want to move while times are still "good".
Most of you know how brutal it was in Chicago last week with temperatures well below zero and outlandish wind chills that made Antarctica seem mild. It may be a bit ironic that Chicago based Truth in Accounting released their latest Financial State of the Cities report last week as well... and that information was just as chilling. 63 of America's top 75 cities are broke. Chicago came in #2 (NYC being the winner - or is that loser) with obligations of $36k per resident. TIA's most recent report on States show Illinois at #3 with Massachusetts and Kentucky being the top 2. Illinoisans are on the hook for nearly $51k each. Those are the amounts that would have to be collected today and invested (earning interest) just to meet pension and healthcare promises (assuming assumptions are valid). That's why there's already an Exodus from Illinois (which reduces the taxpayer base and makes the whole situation worse). For Chicago, their combined state and local obligations amount to $85,600 per person. Congratulations Chicago - you're the brokest city in America. For further details click here. |
AuthorJohn R. Ragan, Captain, USAFR (Ret), MBA, MS - your guide on our journey through The Financial State of the Union Archives
June 2020
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