Tuesday, August 14, 2012
Overall retail is still one of the brighter sides of this story:
This gives current retail data on a YoY basis. The red line is price-adjusted, the blue line is not. So the red line goes through June and the blue line through July. The depth of the trend change is evident when you look at it this way.
If it weren’t for population growth, Gross Domestic Product growth would be about zero. More people eat burgers, get haircuts, drive a vehicle, etc. So, 1 percent population growth will support something like a 1 percent growth in spending. And that’s our basic support level. Absent that (as in Japan and Eastern Europe where it’s near zero), growth would be under 1 percent. And the NFIB indicators point to a continuation of just that kind of growth.
... . Overall, it is clear that the “economic growth stars” are not in alignment and that we can expect very sluggish growth for the balance of the year, ever grateful for population growth which will help insure that we don’t experience the dreaded recession. If consumers and business owners were presented with a plan to resolve our calamitous debt/spending cycle that they could believe in, they would spend more. Until then, no risky bets will be placed.
Sure we do: If you tax something you get less of it. Increase taxes on something and you get less of it. Reward something and you get more of it.
Tax smoking, you get less smoking.
Tax capital gains and you get less capital gains.
Tax property and you get less property.
Tax retail sales and you get less retail sales.
Reward insolvent banks and you get more insolvent banks.
Reward lobbyists and you get more lobbyists.
How do you square July retail sales with sales tax receipts?
Second, CA is only one state.
Last, the seasonal adjustments really kick in during the summer.
If you look at unadjusted retail figures:
It's not surprising that sales tax receipts wouldn't be that hot.
Also remember that the rolling three month average of retail sales, seasonally adjusted, is still dropping. CA's budget expected sales to be better relatively.
Here is the actual release from the CA office.
I don't understand why there would be a timing issue this year, because the 31st was in the middle of a week.
Nonetheless, alcohol tax collections of 8,486 compared to 2011's 34,853 raise questions. I don't believe alcohol usage fell that much.
Retail use and sales taxes collected in July 2012 were 586,962, against last year's 977,624. The mind kind of boggles. I do not believe this represents reality. If it did, CA would be in a momentous depression. We're talking unemployment of over 25%. I think I'd have heard about that.
I've said I believe we are in recession. Not to that degree, however.
I was also interested to see the insurance company shortfall! Corporate and personal income tax are ahead of goal.
If you look at CA's June receipts, you can see issues with sales taxes and alcohol taxes, but not to that degree.
Raising taxes next year as planned ain't gonna happen. Not in this economy.
First off, I think you have far too much "hope" in the intelligence of DC leadership. The top quintile is getting a tax increase, I'd be surprised if they don't. At the very least we'll all get a tax increase in the form of Quantitative Easing.
Secondly, and more importantly, the stupidity is even worse at the state and local level where the union pressure is much higher.
Links to this post: