Tuesday, May 15, 2012

The Illusion of Christmas Prosperity

The latest disappointing retail sales numbers are out. Rather than dwell on that, here's a longer term trend in the data that caught my attention.

The seasonal adjustment factors for December are falling and have generally been doing so for 20 years. That prompted me to create the following chart.

Click to enlarge.

1. Has the Fed permanently stopped us from returning to the red trend line?
2. Would extra inflation keep us near the blue line?
3. Is the stock market generally safe 2-3 years after this chart peaks?
4. Is the overall downward trend a sign of increasing prosperity?

For what it is worth, I would answer "probably not" to all of those questions.

Source Data:
U.S. Census: Monthly & Annual Retail Trade


Stagflationary Mark said...

Should these trends continue, about 55 years from now we will stop spending any extra money in December.

I'm not sure our grandchildren will appreciate the Christmas gift we're leaving them.


fried said...

My family may not be typical, there are three generations of adults and assorted nephews. None of the adults wanted anything. In fact, there were those actively begging for no more sweaters/gloves/ties etc. Parents of kids asked for no more toys...kids had enough. Money spent on tree (does this count?) flowers, and food for festive meals. Family dogs did ok though...new beds, toys and chews. But, pet retail is holding up strongly. So, maybe we are more typical than I think.

Stagflationary Mark said...


Money spent on tree (does this count?) flowers...

I gave my mom flowers for Mother's Day. As always, they came in a new vase. I'm starting to think it is becoming a cruel joke.

Vase bubble?