May Retail Sales Driven By Inflation – What a Sham

Posted on June 12th, 2008 in Daily Stock Market / Economic News - The Real Story

The market rallied on inflation. This will be the shortest post I have ever made except for the Lehman $15 buyout by DB above.

May Retail Sales Expectations were +0.5% and +0.6%. Actual: +1.0% and +1.2% = HURRAY!!! NOT!

Look inside the numbers:Gas Stations +13.8%; Non-Store Retailers (including heating oil deliveries) +10%; Food and Bev Stores +6.2%; Food Services & Drinking Places +5.1%.

Above is all energy and food. Higher prices drove retail sales. This is as far from good news for stocks as any thing I have ever seen. -Best Mr Mortgage

21 Responses to “May Retail Sales Driven By Inflation – What a Sham”

  1. Spend spend spend, before the stuff goes up up up.
    Pure pavlovian psychology and consumer behavior.

    Most of the stuff is gas and food. Tomorrow the Labour Department will release again a low “core” inflation rate. They say only 0,2% core inflation rate. Naturally the “core” that rotten piece of stalinist phoney statistic excludes food and energy.Who needs these things anyways ? 🙂

  2. The Government seems to like keeping food and energy out of important reports, but wow…. go figure…. look what makes up the big gains on this report! Great video on the May foreclosure report. I wonder if the media will just print 97% of foreclosed homes sell and leave out the homes were sold to the banks.

  3. AMEN to the both of you!

    I wonder how in the hell these people can continue to fabricate numbers like this and report them to the American public as fact with a straight face over and over again, and never be called out for the lie in the national media?! Where are all of our super left-wing, government haters right now. Most of them have journalism degrees so, where the hell are they? What is going on in this country? In what Bizarro world are we living in?

    – Restaurant after restaurant closing
    – National stores calling it quits or cutting back at unprecedented levels
    – Auto makers closing plants, dicontinuing models, selling to foreign companies
    – Actual inflation at least 5 times higher than is being reported due to the governments fancy fiddling of the numbers
    – Gas prices through the roof
    – Oil prices through the roof
    – Food prices through the roof (we have other countries hording and warring for food now)
    – Exports at ridiculously low levels because WE DON’T MAKE ANYTHING
    – A war that just keeps going and going and going (right or wrong), and they just keep asking and asking for more money
    – Unemployment through the roof. It’s actually about 13-15%, not this 5.5% crap. They are only including the people who they deem unemployed, not the actual amount of unemployed.

    Believe them and YOU’RE A FOOL.


    Financial Times.

    Explosion of inflation expectations by Brits consumers.

    No ! You don’t say ! Repeat after me. Look in my eyes. I am the master of the FED. I am the master of the galaxy. Repeat after me ! Repeat ! No inflation.

  5. […] out this post by “Mr. Mortgage” on how inflation caused retail sales numbers to show year over year growth, and how the […]

  6. Funny how the media is so focused on non-sense i.e. Britney Spears etc. WHY isn’t the media talking about what is going on in our country. US is drownding in debt, FED is private not run by our government, reports on inflation, housing, avg. incomes, unemployment are ridiculous fabrications. Like Mr. Mortgage says the real estate market is the REO market. I mean almost everyone I know has a job and they are barely getting by..a lot of my friends get by only by getting a little off the credit cards each month because incomes have been going down, prices have gone WAY up, health care is unaffordable etc. These are all people with degrees.

  7. yeah, mike and jrb – it is all b.s.

    We have solid earnings by all standards in our home – (over 100k) impecable credit scores (90th percentile – no kidding – because we have no loans to buy shit we don’t need) and with each up tick in engergy we are feeling pinched – I got us on a budget plan for my heating oil and will have to pay at least $404 per month based on $4 gal oil (but it is 4.49 now) or upwards of $500 ish this year (that could be a nice car payment – If I can’t get one – not many others will be) We have stoped eating out, re-worked cable, insurance for savings, I cut coupons – shop smart, my kid babysits to pay for her extras, etc. and each time we find money in the budget the prices go up and eat up any savings – if this is our situation being really conservative in the first place, this country is done! We were never the type to spend more than we earned, and I am concerned, it is nuts!

  8. Mike Rodeno you are absolutely right! Unfortunately Joe and Jane six pack don’t care that much about any news of value. They only care about that low educational quality material the local media here is feeding them. It is hard even impossible to get on the FM channels any station of value like BBC. Keep them stupid and you will herd them.

  9. No. Spend spend spend before the prices go up. People are stocking up in a big way. It’s getting generalized. Toilet paper, sugar, butter, rice, coffee, toothpaste, hot dogs, you name it. I have noticed the trend even in Canada. People are running scared. As soon as they have a little bit of money, they spend it to accumulate large quantities of food stuff. By the way, food is made up of 80% energy. So with oil at 136$, big price increases are coming. Consumer spending is going up for the wrong reasons. It’s going up because money is losing its value at an accelarating rate.

  10. The real reason why consumer spending is up.
    Foreclosures and people walking away from the loans !
    People that have stopped paying their mortgages, have now more money to spend ! (“The truth about Mortgages” site is right.)It’s about the only logical explanation.

    Borrowers Facing Foreclosure Boosting Consumer Spending11Jun08

    Underwater borrowers who have stopped making mortgage payments are actually padding the consumer spending numbers, according to JP Morgan analyst Tom Lee, Reuters reported today.

    Lee noted that despite the fact that these types of borrowers are likely stretched beyond their means, not having to make a monthly mortgage payment actually equates to a greater amount of disposable income.

    “In a perverse way, people who are leaving homes are actually helping the consumer spending picture,” Lee told the Reuters Investment Outlook Summit on New York.

    “If you were under water in a mortgage, and then you walked away, you literally stop paying the mortgage so your actual disposable income goes up,” he said.

    He cited same-store sales data in May, which jumped 2.5 percent, or more than twice the average increase projected by economists.

    Sadly, those who relied upon home appreciation to fuel their high-cost habits may be finding they can free up their spending power by walking away, and thus, can continue to satisfy their boom time consumption needs.

    The problem, however, is that those falling further into debt without a home equity lifeline will find themselves in a much more severe position, especially when their credit scores take a dive from a foreclosure hit, limiting and/or raising the cost of their future credit use.

  11. China: May retail sales up 22% ! compared to last year.
    Inflation is also about 22 % compared to last year.
    See the sham is global. No place to hide.

  12. As usual the fascist stalinist Labour Department reported today, friday the 13th, a “core” inflation rate of only 0,2%. These people at the Labour Department are nazis. Nothing that comes out of this rotten and foul institution can be trusted.

  13. My “core” inflation includes energy and food you stinking Nazis from the Labour Department.

  14. Welcome to our Orwellian world – where black is white, war is peace, and the CPI is manipulated to conceal real inflation (and permit the government to screw millions of retirees out of their COL adjustments!). Let’s remember that the MSM which bring us all this useless disinformation is controlled by Zionists like Murdoch, Sulzberger, Milchan and all their Zionist buddies at FOX, CNN, BBC, etc. Don’t expect truth, protests or suffering to be reported. Most of all, don’t expect a word about who is responsible for torturing and killing (softly for now and hardly later) thousands and soon millions of Americans. The Grand Depression will never happen because it won’t be reported. All those billions that could be used to help Americans will continue to be funneled to Israel. They don’t want to fight their perceived enemies with their own blood and treasure – they prefer to waste American blood and treasure to fight their perceived enemies for them! Note that not only Bush but also McCain and Obama have already promised their Zionist masters at AIPAC to put the interests (and interest rates) of Israel ahead of the interests of America. What does that behavior amount to?: “None dare call it TREASON”! What is the punishment for Treason?

    But in our Orwellian world, ‘Treason is Patriotism’ – and torture doesn’t exist because we say so! Does this seem like Nazi Germany to anyone – yet? If not, it will be unmistakable soon!

  15. Orwellian world maybe. As for the rest, it the same everywhere. Most of these people are fascists. It’s the typical model low life lying business bastard connected to the White House, the Pentagone and the arms business.

    We will not have the truth from these people. It’s nor just a anglo phenomenom. Would you like to live in Russia or China ? How about India ? It’s global. Has nothing to do with the Z word but the F word and crony capitalism third world country.

    When I think of the US today, I think of a developed country slowly but surely, going the way of South American banana republic and to bankruptcy. More and more a kind of third world country. You are going the way USSR or Argentina went. Overbloated military with imperialistic, arrogant and visionless leaders. Meanwhile the things that count, industry, manufacturing, agriculture, health services and education, are going down the drain.


    U.S. Consumer Prices Rise 0.6% as Fuel Costs Climb (Update2)

    By Shobhana Chandra

    June 13 (Bloomberg) — U.S. consumer prices rose more than forecast in May as Americans paid more for fuel, underscoring the Federal Reserve’s concern that inflation will pick up.

    The consumer price index increased 0.6 percent, the most since November, after a 0.2 percent gain the prior month, the Labor Department said today in Washington. So-called core prices, which exclude food and energy, increased 0.2 percent, matching the median estimate of economists surveyed by Bloomberg News.

    The surge in oil and food expenses has caused inflation expectations to rise, stirring concern among Fed officials after they lowered interest rates seven times since September. Investors expect the central bank will raise rates as soon as August, futures prices show.

    “This report isn’t going to relax the Fed,” said Nigel Gault, chief U.S. economist in Lexington, Massachusetts, at Global Insight Inc., which correctly forecast the gain in prices. “More headline price increases are coming.”

  16. We agree on many of the symptoms of the disease (a kind of cancer) affecting mankind, MA – BUT there is no point in trying to be ‘politically correct’ by saying ‘Z’ instead of Zionism. Even militarism, vision-less and amoral leaders are symptoms of the main disease. Human greed and other weaknesses are played upon and nurtured by Zionists – through their control of the MSM, Academia and other (Western) cultural, political and economic institutions. The values promoted in our culture by those controlling Zionists are greed, selfishness, amorality, atheism, violence, deception – the list of nastiness goes on and on, ad infinitum. It all started with the “Protocols of Zion” and planned, surreptitious infestation of our institutions to bring about their destruction. ‘Cultural Marxism’ is largely a Zionist phenomenon. As part of the PLAN, ‘Christianity’ has been infiltrated and now we have millions of Israel-loving so-called ‘Christians’, being led down the path to hell by the likes of Hagee, Osteen, Warren and countless others.

    There is a PLAN in operation here and the PLAN is for the destruction of humanity (including real Jews) and the dictatorship of Satan and his worshipers. Zionists are the main instigators behind that diabolical PLAN. Bush, McCain, Obama, Pelosi and hundreds of other Israel-FIRSTers are just Zionist stooges – paid off, natural evil-doers themselves or blackmailed into subservience to their Zionist masters.

    It’s ALL explained on my website – in living color! 🙂

  17. Who are these economists that the interview for these reports. Why not strip them of their degrees and have them work for a living instead of sitting around confirming the FED’s views. My problem is how dumb are these traders who warrant this data as credible and create phoney rallies in the stock market and they make so much money doing it.

  18. Here are some real numbers.

    73,000 American homes were repossessed in May, a 158% spike from May 2007. According to latest from RealtyTrac today, foreclosure filings were up big as well, 48% year over year. Nevada fared worst during the month. One in every 118 homes there is in some form of the foreclosure process.

    For all of the U.S., May is the 29th month in a row in which the yearly foreclosure rate has increased.

    U.S. consumer inflation leapt 0.6% last month, the biggest increase in six months. According to the Labor Department’s report this morning, consumer prices have inflated 4.2% over the last year. That’s notably higher than economists expected.

    Predictably, energy-related costs led the way. Today’s report said energy expenses inflated 4.4% in May alone, 17% in the past year.

    And by “energy expenses,” the Labor Department mostly means gas prices. Their specific measure of gasoline costs rose 5.7% in May. According to AAA and, the average retail price rose from $3.60 to $3.97 during the month, or 10%. But who’s counting?

    Today, the national average for a gallon of the cheap stuff is at another record high — $4.06.

  19. “The average retail price rose from $3.60 to $3.97 during the month”. (Agora newsletter)

    Oupps that’s much more than 0,2% or 0,6%.
    Like I said Nazi Labour Department in Washington.

  20. “Play it again Shammy.”

    The Economy

    06/13 Foreclosures Rose 48% in May as U.S. Bank Repossessions More Than Doubled
    06/13 U.S. Michigan Consumer Sentiment Index Drops to 56.7
    06/12 U.S. Import Prices Increased 2.3% in May, Gained 0.5% Excluding Crude Oil
    06/12 Oil Prices, Unemployment Will Limit a U.S. Economic Rebound, Survey Shows
    06/12 Inflation Fear Sends Mortgage Rates to 8 Month High
    06/12 U.S. Jobless Claims Jump in Latest Week
    06/11 Fed’s Kohn Says Risks of Inflation Psychology Higher
    06/11 Concerns on Economy are Shifting to Inflation
    06/10 Trade Gap in U.S. Widens as Record Oil Imports Overshadow Rise in Exports
    06/10 Fed’s Fisher Says Any Move to Increase Interest Rates Should Be `Gradual’

    Financial Markets

  21. Great retail sales.
    That’s why GM and Ford are crashing today, and closing most of their their SUV plants. Kirkokian is losin a bundle in Ford. I even think that rich people don’t understand what is going on in the real economy. They really don’t, not even Warren Buffett with his position in Wells Fargo.

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