Article 43

 

Wednesday, December 28, 2022

BLS or BS - November 2022 Jobs Report

image: st loius fred nuvember 2022 unemployment2

image: bls birth-death data

[T]here were two new developments: first, to facilitate its rigging of the data, the BLS has resorted to the oldest trick in the book, boosting the core goal-seek factor, the business BIRTH-DEATH adjustments, which in October hit a record high 455K, and although it has since dipped to 14K in November, the trend in speculative BLS assumptions about the viability of the US economy (more businesses are created than are shut down only when there is economic solid growth)

...while the Household Survey has gone nowhere since March, the BLS data engineers have been busy goalseeking the Establishment Survey (with the occasional nudge from the White House especially now that the Biden admin needs something to hang its hat on after the GOP recaptured the House) to make it appear as if the economy is growing strongly, when in reality all they are doing is applying the same erroneous seasonal adjustment factor that gave such a wrong perspective of the labor market in the aftermath of the covid pandemic (until it was all adjusted away a year ago). In other words, while the labor market is already cracking, it will take the BLS several months of veering away from reality before the government bureaucrats accept and admit what is truly taking place.
- Something Is Rigged: Unexplained, Record 2.7 Million Jobs Gap Emerges In Broken Payrolls Report

---

The monthly JOB REPORTS headline for November is that another 263,000 jobs got added to the national payroll.

Here it is, right on the BLS WEBSITE:

Total nonfarm payroll employment increased by 263,000 in November, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, health care, and government.  Employment declined in retail trade and in transportation and warehousing.

CNBC backs it up with their BULLET POINTS:

Nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%, the Labor Department reported Friday.

The payrolls number was well above the 200,000 estimate, while the unemployment rate was in line.

Average hourly earnings jumped 0.6% for the month, double the estimate, and 5.1% annually versus the 4.6% expectation.

Where are all these jobs coming from?

Beats me.

To keep up with population growth, we need over 100k new jobs monthly, so consistently holding over 200k, and under 5% unemployment doesn’t sound bad.

But,

I’ve been hunting for a new career for years, and can tell you these days I’M GHOSTED a lot, and the few calls I do get usually end when the caller finds out I’m not fully VACCINATED with Covid shots.  Unfortunately, there’s no figures for “VACCINE HESITANT DENIED EMPLOYMENT”

Across the country, employers are firing workers for refusing to comply with vaccine mandates. Some people are opting to quit their jobs rather than take the shot.

Last year when they started propagandizing TWO JOBS FOR EVERY WORKER - I noticed the same job ads recycled month after month on the job boards, applied for hundreds of them, then see “signon bonus” banners added to the ads the following month.

I think its a sin the GAMES THEY’RE PLAYING WITH OUR HEADS

Where do those unemployment numbers come from?

The BLS U3 report found HERE is one:

bls unemployment data november 2022

What’s notable the last few months are the HOUSEHOLD and ESTABLISHMENT numbers.

What are those?

bls november 2022 household data

bls november household2022

How are they calculated?

Per INVESTOPEDIA:

The official unemployment rate is known as the U-3 rate or simply U3. It measures the number of people who are jobless but actively seeking employment. The rate is measured by the BLS, which contacts 60,000 randomly selected households across the country and records the employment status of each person 16 years old or older.

BLS EXPLAINS:

The payroll survey (CES) is designed to measure employment, hours, and earnings in the nonfarm sector, with industry and geographic detail. The survey is best known for providing a highly reliable gauge of monthly change in nonfarm payroll employment. A representative sample of businesses in the U.S. provides the data for the payroll survey.

The household survey (CPS) is designed to measure the labor force status of the civilian noninstitutional population with demographic detail. The national unemployment rate is the best-known statistic produced from the household survey. The survey also provides a measure of employed people, one that includes agricultural workers and the self-employed. A representative sample of U.S. households provides the information for the household survey.

Something doesn’t add up.

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Here Comes The Job Shock: Philadelphia Fed Admits US Jobs “Overstated” By At Least 1.1 Million

By Tyler Durden
Zero Hedge
December 15, 2022

Regular readers are well aware that BACK IN JULY, Zero Hedge first (long before it became a running theme among so-called “macro experts") pointed out that a gaping 1+ million job differential had opened up between the closely-watched and market-impacting, if easily gamed and manipulated, Establishment Survey and the far more accurate if volatile, Household Survey - the two core components of the monthly non-farm payrolls report.

We first described this divergence in early July, when looking at the June payrolls data, we found that the gap between the Housing and Establishment Surveys had blown out to 1.5 million starting in March when “something snapped.” We described this in ”SOMETHING SNAPS IN THE U.S. LABOR MARKET: FULL, PART TIME WORKERS PLUNGE AND MULTIPLE JOBHOLDERS SOAR.”

We first described this divergence in early July, when looking at the June payrolls data, we found that the gap between the Housing and Establishment Surveys had blown out to 1.5 million starting in March when “something snapped.” We described this in “Something Snaps In The US Labor Market: Full, Part-Time Workers Plunge As Multiple Jobholders Soar.”

image: zero hedge - something snapped

Since then the difference only got worse, and culminated earlier this month when the gap between the Establishment and Household surveys for the November dataset nearly doubled to a whopping 2.7 million jobs, a bifurcation which we described in “SOMETHING IS RIGGED: UNEXPLAINED, RECORD 2.7 MILLION JOBS GAP EMERGES IN BROKEN PAYROLLS REPORT

image: zero hedge - household vs establishment data

Whether this divergence was due to wrong seasonal adjustments (a remnant of the overreaction taken by the Dept of Labor following the covid crunch to normalize for a new normal labor market), due to erroneous Birth-Death assumptions (here too, the Dept of Labor was assuming early cycle new business creation which clearly is wrong with the economy late cycle and millions of businesses shutting down, ignoring the open PPP fraud that took place in early/mid-2000s as everyone “opened up” businesses to get free money from the government), due to the Establishment Survey inability to tell the difference between full, part and multiple-jobs - as a reminder we first showed that since March, the US had lost 400K full-time jobs offset by far lower paying part-time jobs as well as double-counted multiple jobholders…

image: zero hedge - job changes

... due to the record high rate of estimation - recall the 49% Establishment survey response rate was much lower than the 70-75% rate typical in November, meaning the Dept of Labor was literally making numbers up to “complete” the survey…

image: zero hedge - establishment survey estimates 2015-2022

... or some other reason, perhaps including the Biden admin tapping certain Bureau of Labor Statistics officials on the shoulder and advising them to show strong numbers if they want to keep their… well… jobs, we did not know, but we did know that according to the Household Survey, just 12,000 jobs were created since March, while according to the Establishment Survey - which moves markets and sets Fed policy - the increase in jobs over the same period was 2.692 million!

image: zero hedge - jobs since march

We bring all this up again because late on Dec 13, the PHILADELPHIA FED published something shocking: as part of the regional Fed’s quarterly reassessment of payrolls in the form of an “EARLY BENCHMARK REVISION OF STATE PAYROLL EMPLOYMENT”, the Philly Fed confirmed what we have been saying since July, namely that US payrolls are overstated by at least 1.1 million, and likely much more!

First, some background.

As the PHILLY FED NOTES:

“estimates by the Federal Reserve Bank of Philadelphia indicate that the employment changes from March through June 2022 were significantly different in 33 states and the District of Columbia compared with current state estimates from the Bureau of Labor Statistics (BLS) . Current Employment Statistics (CES). Early benchmark estimates indicated higher changes in four states, lower changes in 29 states and the District of Columbia, and lesser changes in the remaining 17 states."</b>

Wait, the Philly Fed tabulates jobs? Isn’t that the jobs of the BLS?

Why yes, the BLS does that every month. The problem is that to successfully publish a report within days after any given month ends, the BLS report gives up in accuracy what it makes up in speed. Far more accurate reports are available elsewhere, they just come with a big lag. This is where the Philadelphia Fed comes in: FROM THE LATEST QUARTERLY REPORT

Our estimates incorporate more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program to augment the sample data from the BLSs CES that are issued monthly on a timely basis. All percentage change calculations are expressed as annualized rates. Read more about OUR METHODOLOGY. Learn more about INTERPRETING OUR EARLY BENCHMARK ESTIMATES.

Ok, ok, what did this “more accurate”, “more comprehensive” report find? It found that…

In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.

Remember what we said in July when we FIRST LOOKED at the March-June divergence between the Household and Establishment survey: we said that “since March, the Establishment Survey shows a gain of 1.124 million jobs while the Household Survey shows an employment loss of 347K!” Said otherwise, we found that payrolls “calculated” by the Establishment Survey were overestimated by 1.5 million. Shockingly, the Philly Fed seems to agree, and reports that instead of the roughly 1.1 million jobs reported by the BLS, only 10,500 new jobs were added!

And some more data:

Payroll jobs in the nation remained essentially flat from March through June 2022 after adjusting for QCEW data:

· Less than the 3.0 percent growth indicated by the sum of the states

· Less than the 2.8 percent growth indicated by the U.S. CES estimates

This is shown graphically in the chart below: specifically, the analysis looks at the quarter in the red box, where the green line, or the more accurate “early benchmark” revision of official data, dipped decidedly below the CES trendline (i.e., the nonfarm payrolls).

image: zero hedge - qcew data

For those who are too lazy to click on the SOURCE REPORT, here is the summary page:

image: zero hedge - revisions

Of course, the above analysis only looks at the March-June period. What about subsequent months and quarters? Well, we will have to wait at least 3 months to get the June-Sept data, but using the same approach which we now know works, and which looks at the divergence between Household and Establishment surveys, it is safe to say that the job “overstating” which was 1.5 million in June according to Zero Hedge and 1.1 million according to the Philly Fed, has almost doubled to 2.7 million from March to November. The only question is what the final, far more accurate Philly Fed estimate will be when it is published some time in 6 months time.

But an even bigger question is when does the BLS realize (or rather admit) what is going on and engages in a shotgun backward revision of data? The most likely answer is that the BLS will simply wait until one of its annual historical data revision periods, when the Bureau of Labor Statistics quietly admits that historical data was higher by a few million, and re-benchmarks current months going forward as if nothing had happened. In the meantime, however, the Fed is shaping monetary policy using the clearly flawed assumption that the US labor market is “hot”, “tight” and “strong”, when in reality we now know that between March and June, monthly payrolls were overstated by about 350,000. This matters because this is what the BLS reported for payrolls for those months:

· April 368K
· May 386K
· June 293K

Now take those numbers and adjust them to subtract an average of 350K from each month (to get the revised Philly Fed payroll over this period) and you get this:

· April 18K
· May 36K
· June 57K

And visually.

image: zero hedge - revisions

Still think the Fed would be hiking 75bps this summer if instead of an average monthly job gain of 350K, Powell was seeing zero monthly payroll increases?

And even more importantly, now that the cat is out of the bag and the Philly Fed has introduced this huge credibility issue in all recent payrolls data, how long until this becomes a political issue, and how long until Republicans - who take control of the House in January - start hearings to demonstrate to the US that the collapse in the labor market did not start with the Republican takeover but was well in place last summer.

And finally, how long until the Fed - which made it clear that it is no longer focused purely on inflation numbers (which are sliding fast anyway) but will also be looking at clearly wrong jobs data - makes it a point that the US labor market is in far worse shape, it is in fact contracting, than it was when it decided to hike 75bps several times in a row?

SOURCE

Posted by Elvis on 12/28/22 •
Section Dying America
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Thursday, December 15, 2022

America In Collapse 7 - More Suffering

image: class warfare

Over the past several decades a “global elite” has emerged whose connections to each other have become more significant than their ties to their home nations and governments
- Rise of the Superclass, 2008
 
Signs have been around for awhile hinting at the breakdown of the US society. For instance at WORK, with its FEUDALISTIC UNDERTONES, and HOME RAGE from those getting kicked out of their houses, may only be the beginning.  Some even predict a BREAKUP OF THE UNITED STATES.
- Bad Moon Rising Part 34 - US Revolution, December 17, 2008
 
For the most part, American bankers whose rash pursuit of profit brought on the 2008 global financial collapse didn’t get indicted. They got bonuses.
- Vietnam’s Solution to Corrupt Bankers, 2014
 
“The TRANSITION FROM DEMOCRACY to oligarchy usually starts with the very wealthy acquiring political power by buying influence with elected officials,” Hartmann wrote in his book, explaining that their influence grows until they “completely CONTROL THE MECHANISMS OF INFORMATION” and “their agenda overwhelms the governing agenda.”
 
“In the final stages, Hartmann said, “the oligarchs RISE UP through seemingly democratic processes and take complete or near complete control of government, smashing the programs that give economic and democratic power to the people and cruelly punishing dissent.
- Return of the Oligarchs
 
In periods of acute crisis for the bourgeoisie, Fascism resorts to anti-capitalist phraseology, but after it has established itself at the helm of State, it casts aside its anti-capitalist rattle and discloses itself as a terrorist dictatorship of big capital.
- Growth of Socio-Fascism in Britain
 
The only thing that can possibly transform the U.S. government to one that cares for the voters who elect it, rather than for the plutocracy that controls it, is a UNIFIED OPPOSITION BY ALL OF THE PEOPLE, irrespective of their social class or political beliefs. The energy driving such a mass movement must flow from the personal actions taken by each of its individual participants.
- Challenging America’s Plutocracy

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AFTER newly-elected Democrat President Biden screwed the working class by NOT SENDING OUT promised covid stimulus checks a year and a half ago, things here keep getting so bad for the 99%, THAT:

Shoplifting is up markedly since the pandemic began in the spring what’s distinctive about this trend, experts say, is whats being taken - more staples like bread, pasta and baby formula… Those who are stealing to survive are not out there talking to the Washington Post about it They’re ashamed to be in the position in which they have to steal.

Over on YouTube, an Epic Economist VIDEO reports:

Walmart, Target, Rite Aid, Home Depot, CVS, Walgreens, Best Buy, and many other big brands are now threatening to close stores due to an industry-wide problem that is causing major losses to retailers and severe consequences for their customers. According to several reports, the holiday season is making things exponentially worse, and experts note that many companies will be forced to raise prices even further to offset their losses or face the risk of going out of business in the months ahead.

Last week, Walmart joined the growing list of retailers being plagued by raging theft amid the busiest shopping season of the year. In the past few months, big pharmacy chains like CVS, Rite Aid, Walgreens, and retail giants including Kroger, Target, Best Buy, and Home Depot, all publicly cited shoplifting concerns and reported acute financial losses.

In the retail world, shoplifting is often referred to as “shrinkage” and this year, shrinkage is biting a big chunk out of retailers profits. Over the past twelve months, rising retail theft cost the industry $94.5 billion in losses, nearly double the amount from a couple of years ago, according to data from the National Retail Federation. In fact, last month, Target CFO Michael Fiddelke said that the company expects to lose over $600 million in gross profit by the end of the year due to shrinkage from shoplifters, “This is an industry-wide problem that is often driven by large networks of offenders,” Fiddelke stressed.

“It’s a misdemeanor. It’s not a felony. So, people are using theft as a business to fund other illegal activities because there’s not a penalty for it,” emphasized California Retailers Association President Rachel Michelin. Given that shoplifting isn’t a priority in the justice system, big retailers are forced to hire loss-prevention specialists to combat the issue themselves. And thats all at the company’s expense.

Walmart CEO Doug McMillon said the big box retailer would close several stores if thefts continue to plague those locations. Right now, Walgreens is actually in process of closing five locations in San Franciso, where the rate of shoplifting turned stores unprofitable. Since 2019, more than 10 Walgreens stores in the city here shut down due to the same reason.

The latest events have alarmed Home Depot CEO Bob Nardelli, who said last year that retail theft was an epidemic, that was spreading faster than COVID. Our associates are afraid. The retail salespeople are afraid. Consumers are afraid. We’ve got to get control of this. And if the administration doesn’t get control of this, they’re abdicating it to the businesses, both public and private, stresses the CEO.

Researchers with the Heritage Foundation warned that the surge in organized retail theft will shutter storefronts and further increase consumer prices. “If companies can’t increase their costs to cover the cost of the theft, if they’re not making a profit, then they’re going to go out of business,” Puzder alerts. Stores in cities where the issue is rampant are left with two options: further hike up prices to cover the cost of theft or close locations struggling to turn a profit, said Joel Griffith, a Heritage research fellow."The companies have to make up for that loss somehow,” Griffith explains.

The problem is getting worse by the day, and its spreading all over the industry. And even though big brands are seeing their balance sheets being impacted by this wave of organized robbery, at the end of the day, the hardest hit will be ordinary Americans, who may lose access to their favorite stores and cope with skyrocketing prices that never seem to stop rising.

For the 18 years this website’s been on the internet, inequality keeps getting worse.

Don’t expect any help from politicians masquerading as LAW MAKERS who manage to stay in power, and blame us for everything, while capitalism’s inequality and blood sucking rich run the country. Will “we the people” ever FIGHT BACK?

To show us how out of touch, and insulting our elected officials are with the suffering people they claim to represent, Business Insider quotes SENATOR MITCH MCCONNELL:

“You’ve got a whole lot of people sitting on the sidelines because, frankly, they’re flush for the moment,” the Kentucky Republican said. “What we’ve got to hope is once they run out of money, they’ll start concluding it’s better to work than not to work.”

This year AT AT&T:

CEO John Stankey said that customers are “starting to put off paying their phone bills”

Even the Federal Reserve NOTED IN JUNE people can’t afford a gallon of milk anymore:

“They are also doing things such as purchasing half a gallon of milk instead of a gallon.” Contacts broadly expected to continue to push up their prices over the next 12 months to keep up with rising costs.

Our BRAINWASHED KIDS are being led to think unionizing a couple of Starbucks’ and Amazon warehouses are going to miraculously end a decades old era of corporate America’s outsourcing, offshoring, and replacing of American workers with foreigners andautomation.  Unless they, boomers, young, old, black, white, latinx, etc, rally together in a general strike of all workers everywhere, and grind this country’s production to a halt - they’re going to be in for a rude awakening.

Starbucks and the powerful corporations will just CLOSE THE UNIONIZED STORES, and laugh at us, while government protects them.

Starbucks will tell you it’s all about safety. But a lot of workers are second-guessing that, as are customers who frequent the shops. They say it seems to be more about squashing union activity. About one-third of the stores that are about to close are involved in union efforts.  This is what piqued the curiosity of a lot of workers and customers. These are busy spots, including one on 23rd and Jackson in Seattle, and the beloved Gaybucks, as the kids call it, on Capitol Hill. People are very curious about whether safety is the real reason.

Over at our southern border, battling Covid isn’t the big thing.

THIS IS:

“The record number of illegal migrants coming to the US southern border is OUT OF CONTROL and President Joe Biden appears to be doing nothing to help local law enforcement deal with the crisis,” Maverick County Sheriff Tom Schmerber said.

And President Biden is sending billions to a war that may make this all moot.

How’s the GREAT RESIGNATION doing?

Supposedly - every talking head on mainstream news and politician on TV is talking about a “worker shortage” leang to everything from CUTTING UNEMPOLYMENT in the middle of Covid, to the raising of interest rates on our credit cards, to INFLATION and price gouging from corporate America.

The millenials are so broke that they’re BLAMING BOOMERS for their lousy lives:

“As millennials are now the poorest generation ever, we at Hunter Design Company will no longer be offering a senior discount,” a text overlay on the video reads. Because let’s face it, if you get to retire, you don’t really need it. So, Hunter Design Company is proud to offer, for the first time ever, the millennial discount. A discount for millennials by millennials because you’re entitled to it.

Over at GALLUP:

Lower-income Americans are about as likely now as last fall to say they are experiencing either severe or moderate hardship - 74%, compared with 70% in November.

Footware News REPORTS:

As consumers pivot to mainly non-discretionary categories, big-box and department store retailers have seen excesses in discretionary categories like apparel.

In the last week, retailers like Target, Walmart and Kohls have mentioned cancelling or cutting down on orders to stay ahead of their higher-than-usual inventories. Meanwhile, brands that partner with wholesale retailers have noted the impact of these cancellations.

Kohl’s has also pulled back on order receipts and increased promotions to get through an inventory glut.

Even FACEBOOK is laying off:

Meta Platforms is planning to cut expenses by at least 10% in the coming months, in part through staff reductions

MSNBC last month talked to a bunch of regular people:

EVERYBODY IN CONGRESS, almost everybody in congress is certainly wealthy, independently wealthy, more money than they would be making from their congressional salaries, even if they came from poverty,” said Chris. “And I don’t think they understand how expensive it is to live right now. I don’t think they understand how expensive rent is, the number of houses signed for less than $300,000 has dwindled to almost nothing in the last five years, just the fact that nobody can access, not even building wealth, but just getting stability.”

When asked by Luntz “to describe” in one word “conditions in America right now,” respondents did not hold back.

“Poor,” said Tiffany of New York.

“Disparity,” said Jen of Washington, D.C.

“Struggling,” said Sal of Florida.

“Confusing,” said Kirsten of Illinois.

“Uncertain,” said Paul of New York.

“Depressing,” said Brian of Michigan.

“Miserable,” said John of South Carolina.

“Divided,” said Susan of California.

“Shaky,” said Jana of Nevada.

“Unstable,” said Rich of Idaho.

“Polarized,” said Chris of Pennsylvania.

“Dire,” said Valerie of California.

“Dismal,” said Debra of Wyoming.

“Division,” said Bob of Texas.

---

Walmart says shoppers are swapping lunch meat for beans in the latest sign that inflation is roiling low income households

By Aine Cain
Business Insider
August 16, 2022

Walmart shoppers are reaching for beans over lunch meats, the company said Tuesday, in the latest sign that INFLATION is hitting low-income consumers the hardest.

While Walmart’s average customer is an EDUCATED SUBURBAN WOMAN, the chain has also historically catered to LOWER INCOME SHOPPERS. When inflation first began to spike, the company even saw a BOOST in sales, owing to its penchant for steep discounts. But as prices continued to skyrocket, Walmart began to deal with its own CUSTOMERS erasing items from their shopping lists or swapping certain purchases for cheaper substitutes.

“Instead of buying maybe deli meats or beef, they’re trading down to things like canned tuna, chicken and, even, beans,” Walmart CFO John Rainey told investors. “We’re seeing the same thing in the quantity, where they’re trading down for smaller pack sizes that are more affordable. So instead of buying 12 items to buy six items in a pack.”

Rainey said the big box giant’s shoppers are also generally buying fewer items and foregoing general merchandise for cheap food options like Walmart’s private label offerings.

In June, the inflation rate hit 9.1%, a 40-YEAR-HIGH. Since then, prices have begun to cool down somewhat. In July, PRICES only rose 8.5% year over year, marking an end of the trend of month-over-month spikes. Still, ongoing inflation has made many Americans feel substantially poorer whenever they hit the grocery store or the gas pump.

Fuel proved to be an increasingly-expensive necessity over the summer. Staples like eggs, beef, and pork have also seen surging costs. In June, the price of beef jumped 4.5%% month-to-month, while eggs increased 3% and pork leaped 3.1%.

But these high prices aren’t borne equally by everyone. Rising prices have especially harmed low-income to middle-class individuals, as opposed to their wealthy counterparts. Thousands of citizens fell below the poverty line in 2020, and experts have expressed concern that ongoing inflation could make matters worse by sparking a recession.

SOURCE

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Parents are buying fewer baby clothes, a sign of deep financial distress

By Parija Kavilanz
CNN Business
November 21, 2022

Customers are pulling back on spending at Gap and Old Navy - particularly in one specific category that shows just how much families are feeling inflations pinch.

In tough times, parents typically skimp on themselves and focus on meeting the needs of their growing children. But Gap and Old Navy said Thursday theyҒre now seeing less spending on babies and kidsҒ items.

“Spending on kids is one of the last areas most parents cut back on, so softness at Gap and Old Navy suggests that some households are under significant financial strain, said Neil Saunders, retail industry analyst and managing director of Globaldata.

Because these brands cater to mid-to-low income shoppers, this decline in spending is a very real indicator of how deeply budget-conscious households are feeling the pain of higher prices. They’ve been forced to go to their last resort.

Overall inflation is up 7.7% compared to 2021, even as the latest reading on prices that households pay for necessities and discretionary purchases showed a SLIGHT SHUTDOWN.

The cutback in kids’ clothing spend at Gap Inc. (GPS) - which operates its namesake Gap stores, Old Navy, Banana Republic and Athleta divisions under its corporate umbrella - was part of the companys third-quarter earnings release Thursday.

While overall company sales were up 2% from last year to $4 billion for the quarter ended October 29, the retailer noted that sales growth at both Gap and Old Navy were offset by weaker sales in kids and baby categories.

“Old Navy customers still have a propensity to buy. That being said, it continues to experience softness in spending and shopping frequency from its lowest-income consumers,” Bobby L. Martin, Gap Inc.Ғs interim CEO, told analysts during the earnings call Thursday.

It’s not just Gap. According to market research firm NPD, purchases of infant and toddler clothing are down this year: From January through October, sales of clothing for infants and toddlers declined by 3% in revenue and 6% in units sold versus the same period last year.

“This is a huge indicator of financial strain,” said Marshal Cohen, chief retail industry analyst with NPD. “One has to look at the total picture. Are families just trading down to less expensive products and stores or is it a pullback in general?”

“The other thing to watch is how long the pullback lasts,” he said. “Parents can go just so long in clothes that are getting a bit small, but not for long. So a quarter slide is one thing - multiple quarters [of decline] send a strong message.”

Turning to resale

As parents purchase fewer new items, theyre turning to resale platforms instead to buy kids clothing and other necessities for less.

Resale platform Mercari said a survey of more than 2,000 parents in March by Globaldata found that 62% said they bought secondhand items for children sometime in the past year. More than a quarter said inflation motivated those purchases, and half of parents surveyed sold a secondhand item in the kids’ and baby items category.

Mercari said parents of kids 2 and under are the most active secondhand shoppers, according to its survey.

“This shift [to reuse] is gaining momentum in 2022 as consumer prices rise amid inflation and ongoing uncertainty,” Mercari US CEO John Lagerling, said in Mercari’s 2022 REUSE REPORT: FAMILY EDITITION.

“Americans spent a total of $143 billion on kids and baby items alone in 2021. By 2030, this figure is expected to grow to $182 billion. In our opinion, that’s simply too much,” he said.

“Secondhand shopping is becoming a lifeline for budget-strapped households,” said Burt Flickinger, retail expert and managing director of retail consultancy Strategic Resource Group.

“Families are relying heavily on CREDIT CARDS to pay their rent, food and gas bills and everything else. “Household wealth is down, while cost of food has surged,” said Flickinger. “If they didn’t plan for it earlier, parents are shopping at resale and taking hand-me-downs from family and friends.”

SOURCE

Posted by Elvis on 12/15/22 •
Section Revelations • Section NWO • Section Dying America • Section Next Recession, Next Depression • Section Austerity American Style
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