A new snapshot of economic collapse: The Wall Street Journal’s MarketWatch reports “U.S. retail sales fell in May for the second month in a row – the first time that’s happened in two years – as consumers spent less to fill up their gas tanks.”
This led to a 0.2 percent seasonally-adjusted decline in retail sales for May, while April was also revised downward to a 0.2 percent loss, instead of the initially reported 0.1 percent gain. It’s funny how everything seems to get revised downward these days.
If gas prices are taken out of the picture, May saw the same kind of weak 0.1 percent increase that was first reported for April… at least, it will until the inevitable “downward revision” hits next month. Much of this was driven by “strong demand at auto dealers and Internet retailers,” according to MarketWatch. The automobile increase is a bit puzzling, because unit sales actually slid significantly in May. This would, taken at face value, suggest that auto dealers are selling fewer cars for higher prices.
Poring over the data, MarketWatch detects “a potentially worrisome sign,” which is the loss of sales at “virtually all of the establishments that tend to rely on discretionary income — extra money consumers have left over after paying for bills and necessities.” This fits with recent reports of declining family net worth, and the dramatic loss of full-time jobs, to be replaced by part-time and temporary work.
These figures illuminate the complex relationship between energy prices, inflation, and consumer demand – a delicate system resolutely ignored by Obamanomics and its suicidal “green energy transformation” ideology. Gas prices are falling because retail gasoline demand is down. That’s a very bad sign during the big summer-vacation driving season. Economic malaise and unemployment anxiety are shifting the consumer economy into a dangerously low gear, as it struggles to climb a terribly steep “recovery” hill.
This news is also a stunning repudiation of the wild rhetoric flung around by the Obama Administration over the last few months, when it was panicking over gas prices, and desperately insisting they were somehow immune to the laws of supply and demand. That’s why developing American energy resources supposedly wouldn’t affect the price of gas at all, while skyrocketing gas prices were blamed on evil “speculators” by the President.
The corresponding drop in wholesale prices very clearly illustrates the way fuel costs influence the cost of virtually everything we buy. It also provides a clear warning about the disaster awaiting us, if we give clumsy, politically blinkered central planners ever more control over a high-performance economy they will never understand. They only know what they want out of the American economic machine, and they’re prepared to alternately kick it and pump it full of unstable “stimulus” and “bailout” fuel until it lives up to their expectations.