First retail, and now restaurant spending declines dismiss remaining Hopium for the economy
When the Federal Reserve last month tried to spin the deteriorating economic numbers as a ‘transitory anomaly’ in their March FOMC minutes, they blatantly ignored every real indicator which showed that not only were consumers buying less, but they were also paying more due to rising price inflation. ¬†And this rapid decline in the most important segment of the economy appears to be getting even worse now that consumer spending and customer traffic at most of the country’s restaurants are validating that economic conditions are most likely well into a new recession.
Any trace of optimism was doused with the¬†latest BlackBox snapshot report (based on weekly sales data from over 27,000 restaurant units, and 155 brands representing $67 billion dollars in annual revenue) which found that May was another disappointing month for chain restaurants by virtually all measures.
Same-store sales were down -1.1%, which represents a 0.1% decline from April. At the same time, same-store traffic “growth” also dropped by -3.0% in May, down 3.2% on a rolling 3 month basis. Although traffic results improved from prior month, the growth in check average was lower than it has been in recent months, causing the fall in sales growth vs. March and April.
More concerning is that the restaurant industry has not reported a month of positive sales since February of 2016, according to BlackBox. – Zerohedge
The rapidly declining downturn in dining out has even hit some of the more expensive restaurants in well populated cities such as New York and Washington DC, where several eateries have begun to sell their meals at cost just to break even so they can remain open.
With the offshoring of most industry over the past 40 years, consumer spending continues to make up the bulk of America’s annual GDP. ¬†And if the trends in both retail and restaurant activity continue to spiral downward as the consumer validates they have no more blood to give, then it will not be too long before the Fed finds themselves having to revere course and lower the interest rates they have been seeking to hike because the economy will have shattered their false models on ‘economic recovery’.
Kenneth Schortgen Jr¬†is¬†a writer for The Daily Economist, Secretsofthefed.com,¬†Roguemoney.net, and Viral Liberty, and hosts¬†the popular youtube podcast on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.