Retail Sales, slowly going down … With retail stocks surging on the back of the any-minute-now recovery (justified by the might of the Federal Reserve printing press), we thought it perhaps useful to consider just how great things are in the retail sales space. Given the non-stop accelerating rise in the equity prices, retail sales must be accelerating or must have turned up green-shoot-like? Well not so much.

As the chart shows, while retail sales (ex-food) is still rising modestly YoY, it is doing so a decelerating pace (as income growth stagnates and discretionary income slumps). But for now, all we must believe is the market knows best,until, 2008-like, it doesn’t.

US Savings Rate Near Record Low — Per Capita Disposable Income Almost Back To 2006 Levels

The lost decade … soon to be.

For those claiming there is something called a “recovery” underway, perhaps they can point out just where on this chart of Real Disposable Income per capita one can find said recovery. Because we are confused: with the average Real Disposable Income of $32,663 per person, or lower than where it was in December 2006 ($32,729), one may be excused for scratching their head.

How about you? You got any disposable income left?

Money Left Over After Taxes Biggest Plunge Since 1959…It’s called You Discretionary Funds, the Money You have left to Spend on Yourself

Money left over after taxes biggest plunge since 1959...

Has anybody told you this today???

The biggest plunge in your discretionary income since 1959.

Why is Wal-Mart worried? Payroll tax could cut consumer spending.

Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out.

As a result, more than three years after the recession officially ended, American consumers might be preparing to downshift again, if only slightly, with low-income consumers hit the hardest. Sensing consumer trepidation, retailers are scrambling to adjust.

Retailers, restaurants, and consumer goods companies like Wal-Mart are lowering sales forecasts and adjusting marketing campaigns ahead of expectations that consumers will slash spending, the Wall Street Journal reports.

American Food Inflation, Up Up and Away

Pain at the supermarket. Food prices up 6.9 in the first quarter of this year(2012) compared to the same time in 2011.

Low food price has been one of the lynch pins under the American dream … As well as low energy prices. So what is Obama doing, simply drive up the cost of both, removing any idea of discretionary income in the average Americans pockets. I will show you what it’s like to live in Kenya, Hah! Take that, you infidels.

latimes

A basket of meats, cheese and other goodies from the grocery store cost 6.9% more in the first quarter of 2012 than it did a year earlier, according to the American Farm Bureau Federation.

A group of 16 items, including cheddar cheese, sirloin-tip roast, salad, orange juice and eggs, cost consumers $52.47 during the first three months of the year, the farm group said. During the same period last year, the price was $49.07. In the fourth quarter of 2011, it cost $49.23.

The cost of meats such as sliced deli ham and bacon were up due to strong demand and tight supplies, said AFBF senior economist John Anderson in a statement. But prices may have peaked, allowing for less expensive protein as the year continues, he said.

Flour, russet potatoes, apples and toasted oat cereal have all become pricier for consumers, according to the report. Only three items in the basket have gotten cheaper: whole milk, white bread and boneless chicken breasts.

Farmers ended up with an average of 16%, or $8.44, of the revenue from each theoretical basket. In the mid-1970s, they would receive about a third.

Americans spend less than 10% of their disposable annual income on food — less than any other country, according to the USDA.

Do you know why the new government rules don’t count food and energy when figuring inflation?

Buy a House!

A little more than a year ago, a very successful professional investor declared, “If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.”

Since that declaration, house prices have continued drifting lower in most parts of the country. The Case-Shiller index of national home prices is down about 4% year over year. Even so, we’re betting this professional investor was merely early…not wrong. US housing isn’t just cheap; it is the cheapest it has been in more than 40 years. And when one considers the possibility that inflation may rear its head soon, housing looks even cheaper still.

If you think we’re crazy, you’re not alone. The housing market is a complete bust right now. The following chart shows the median home price in terms of per capita disposable income. Based on this calculation, home prices are lower than they have been in 40 years!